Nomura names M&M, Hyundai, Ather Energy as top picks after June auto sales; says EV penetration at inflection point

After strong June auto sales data, Nomura said that India’s EV penetration is at an inflection point, while naming Mahindra & Mahindra (M&M), Hyundai India, Ather Energy and Sona BLW Precision Forgings as its top auto picks.

In its latest note, the international brokerage said that healthy demand momentum continued across auto segments in June. Medium to Heavy Commercial Vehicles (MHCV) wholesale volumes were significantly higher than estimates, led by easing geopolitical concerns and news of a possible steep 2.5% price hike from July.

What's boosting EV adoption?


Tractor volumes were also ahead of estimates in June, although concerns remain on the outlook due to El Niño worries, Nomura said. The international brokerage highlighted that consumer interest in electric vehicles remains robust, with EV penetration increasing further to 7.5% for PVs and 10.6% for two-wheelers in June 2026.

“New launches and improving charging infrastructure continue to support EV adoption…We prefer companies which stand to gain from this trend. ICE-dominant OEMs which don't have strong EV capabilities face de-rating risk,” Nomura said. As geopolitical concerns continue to ease, commodity prices have moderated across key metals, improving the cost outlook for OEMs, it further said, adding, “In our view, input cost pressures have eased to nearly 2.3% for PVs and nearly 3.4% for two-wheelers (January 2026 to July 2026); however, we continue to believe that strong margin pressure will be present in Q1 FY27 across OEMs.”

India's passenger vehicle sales stood at nearly 4.11 lakh units in June, recording an annual jump of 28.63%, according to the latest data released by the Federation of Automobile Dealers Associations (FADA). The autodealers' body reported that the total automobile industry retailed 25,57,234 units with a 21.83% growth in June, with tractors recording 25.31% growth, two-wheelers at 21.22%, commercial vehicles at 16.88% and three-wheelers at 16.21%.

Also read: India's retail car sales jump nearly 29% in June

Nomura's top auto picks

Nomura maintained its ‘Buy’ rating on the shares of M&M, Hyundai, Ather Energy, Uno Minda and Sona BLW Precision Forgings, and ‘Neutral’ ratings on the shares of Maruti Suzuki, Eicher Motors and Hero MotoCorp.

The international brokerage has a target price of Rs 4,580 per share for Mahindra & Mahindra, implying an upside potential of more than 46% from the stock’s previous closing price. For Hyundai Motors India, Nomura has a target price of Rs 2,407 apiece, implying an upside of nearly 21%.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)