Several automotive and component stocks gained momentum following Nomura's positive outlook on the Indian automobile sector. According to reports from Moneycontrol, Mahindra & Mahindra rose 0.41% to ₹3,142.10 and Sona Comstar gained 0.29% to ₹670.50 in early trading. However, Ather Energy slipped 0.73% to ₹1,216.80, while Ather Energy India fell 0.41% to ₹1,976.80 and Uno Minda declined 0.43% to ₹1,161.10. The mixed performance reflects selective investor interest in different segments of the automotive value chain.
In a July 11 note, Nomura revised upward its FY27 auto industry volume estimates across all segments. As reported by Moneycontrol, the brokerage expects passenger vehicles to remain the biggest growth driver, raising its FY27 and FY28 volume growth estimates to 13% and 6% respectively. Nomura's dealer surveys continue to indicate strong demand momentum despite fuel price hikes and vehicle price increases. The brokerage also upgraded growth estimates for other segments, raising two-wheeler growth estimates to 8.5%/6.6% from 7.4%/6.2%, medium and heavy commercial vehicles to 8%/5% from 5%/5%, and tractors to 5%/5% from 0%/5%.
Nomura expects electric vehicle adoption to accelerate significantly across both passenger vehicle and two-wheeler segments. According to the brokerage's projections, EV penetration in passenger vehicles is forecast to rise from 3.9% in FY26 to 8.8% by FY28 and 12.7% by FY30. For two-wheelers, EV penetration is expected to increase from 6.6% in FY26 to 11.3% by FY28 and 19.6% by FY30. These projections reflect the growing consumer acceptance of electric vehicles despite ongoing input cost pressures in the automotive sector.
Recent industry data supports Nomura's optimistic forecasts, with Crisil estimating that India's automobile sector is expected to report revenue growth of 22-24% year-on-year in the first quarter of FY27. As reported by Crisil, the sector is projected to be among the largest contributors to corporate revenue growth in the quarter. The agency estimated overall corporate revenue to have grown 11-11.5% year-on-year in the quarter ended 30 June 2026, the fastest pace in two years despite supply chain disruptions and higher input costs from the West Asia conflict. Nomura maintains its positive stance on several automotive companies, maintaining Mahindra and Mahindra and Ather as top picks in passenger vehicles and two-wheelers respectively, while also maintaining its Buy rating on Hyundai Motor India.
India's electric two-wheeler market is experiencing a significant shift toward established manufacturers, with TVS Motor, Bajaj Auto, Hero MotoCorp, and Ather Energy accounting for nearly 96% of H1 2026 growth. According to Fada data, electric two-wheeler registrations rose 53.3% to 970,993 units during January-June 2026, with these four manufacturers contributing 322,621 units or 95.6% of the net addition. Their combined market share increased from 66.6% in H1 2025 to 76.7% in H1 2026, indicating that growth is increasingly being captured by manufacturers with scale and established brands. TVS remained the largest with 251,438 units (up 65.7% YoY) and 25.9% market share, while Bajaj registered 218,089 units (up 48% YoY) and Hero achieved 106,019 units (more than tripled YoY).
