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Best Automobile Stocks in India

19 May 2022

Auto stocks are one of the best performing sectors in India. The automobile sector is one of the fastest-growing sectors in India. You can find a wide range of vehicles available in India, including cars, bikes, scooters, and even tractors.

The auto industry is expected to grow at a CAGR of 7% over the next few years, due to several factors including rising disposable income, strong demand for cars and trucks, and increasing government focus on infrastructure development.

As the automobile industry grows at an exponential rate, there are a number of stocks that are making headlines. These stocks have been performing well in the last couple of years and we expect them to continue to do so in 2022.

10 Best Automobile Sector Stocks to Buy Now In India in 2022

S.No.

Company Name Industry

1.

Maruti Suzuki

Automobile

2.

Tata Motors

Automobile

3.

Mahindra and Mahindra

Automobile

4.

Bajaj Auto

Automobile

5.

Eicher Motors

Automobile

6.

Motherson Sumi Sys

Automobile Ancillary

7.

Hero MotoCorp

Automobile

8.

Balkrishna Industries

Automobile – Tyres

9.

Bosch

Automobile Ancillary

10.

Ashok Leyland

Automobile

Factors To Consider Before Buying Automobile Sector Stocks 

Auto sector stocks are the best bet for growth in 2022. The auto industry is expected to grow at a CAGR of 6.8% during 2020-2023, driven by increasing demand from emerging markets and the growing need for mobility among people.

With that in mind, here are some factors you should consider before buying Auto Stocks in 2022:

  1. Company’s Financial Health

Avoid companies with too much debt. If a company has too much debt on its books, it may not be able to pay back what they owe when they default on its loans or bonds. This can cause the stock price to drop dramatically and leave investors with nothing left but worthless shares in an insolvent company.

  1. Check Out their Cash Flow Situation

Before buying any stock, make sure that they have enough cash flow to sustain themselves until they can turn a profit and start paying dividends again! If they don’t have enough cash flow coming in every month then it’s unlikely that they’ll be able to pay off any debts anytime soon – which could mean trouble down the road if things don’t get better soon enough.

  1. Dealing with Cyclical Nature

Any company that deals with this type of industry have to have a plan for dealing with the inevitable downturns. A good company will be able to come out stronger from these downturns. They will be able to weather the storm and come back stronger than ever before. They need to have a good strategy for dealing with these cycles to reduce volatility in their stock price over time.

  1. Lowering Volatility

The volatility of automobile stocks can be measured by its beta coefficient, which is calculated using regression analysis on historical data. The lower the beta coefficient, the less volatile it will be compared to other companies in the same sector or industry groupings like oil & gas or telecom services etc., while higher values indicate higher volatility levels which may not be suitable for long-term investors who want stable returns over time without worrying about sudden drops due to external factors like global economic slowdowns etc., which may affect the company’s sales volumes significantly if they happen at an unexpected time.

  1. Visible Growth

This means that you should look for companies that are clear about their plans for how they’re going to grow in the future, and how much they expect to sell each year. It’s important to look at visibility in growth and the ability to come out stronger from downturns. You want to make sure that the company has a plan for growth over the long term and has shown an ability to bounce back from difficult times.

Performance Overview of Best Auto Stocks in India

  • Maruti Suzuki

Maruti Suzuki is a leading automobile manufacturer in India. It is the largest car manufacturer in India with a market share of over 50%. It has been on top of the list of both auto sector share and the most preferred car brands for many years now. Maruti Suzuki will be expanding its manufacturing facilities and increasing production capacity at existing sites as well as adding new ones across India and abroad. It will also be introducing new models for emerging markets such as Indonesia and Vietnam where demand for low-cost vehicles is growing rapidly due to rising incomes among younger consumers who want more affordable options from brands like Maruti Suzuki (which already sells millions of inexpensive cars every year).

  • TATA Motors

Tata Motors is a leading manufacturer of trucks, buses, tractors and cars. The company has been in operation since 1992. Tata Motors was founded by Ratan Tata in 1945 as a small business making steel containers for commercial vehicles.

The company’s key brands include Jaguar Land Rover (JLR), Land Rover, Jaguar and Range Rover. Tata Motors also owns two other major automobile manufacturers including Daewoo Commercial Vehicles Co Ltd (DCVL) which produces trucks, buses and passenger cars under the Daewoo brand name and Tata Daewoo Auto Ltd which produces trucks under the Daewoo brand name.

  • Hero MotoCorp

Hero MotoCorp is a manufacturer of motorcycles, scooters, and auto-rickshaw in India, based in New Delhi. The company was established in 1984 and has a market capitalization of $8.4 billion. It is one of the largest manufacturers of two-wheelers in India. Hero MotoCorp offers motorcycles, scooters, and auto-rickshaws under the Hero brand name. The company also manufactures engines for other automobile companies such as Mahindra & Mahindra (M&M), Tata Motors, and Ford Motor Company.

  • TVS Motors

TVS Motors, one of the largest two-wheeler manufacturers in India, is expected to see massive growth in the coming years. The company has been growing at an annual rate of 15% over the past few years, and it is expected to continue this trend over the next decade as well. This growth has been driven by several factors, including strong demand for its motorcycles and scooters in India. In addition, TVS also manufactures cars under the Jupiter brand name. These vehicles are sold through dealerships across India as well as through online stores like Amazon India and Flipkart.

  • Bajaj Auto

Bajaj Auto is India’s second-largest two-wheeler manufacturer. The company is a part of the Bajaj Group, which was established by Jamnalal Bajaj in 1884. In the year 2000, Bajaj Auto became a listed company on the Bombay Stock Exchange and National Stock Exchange. The company manufactures scooters and motorcycles under the brand names Pulsar and Discover respectively.

Conclusion

If you’re looking to invest in automobile sector stocks, make sure that your broker has access to information about these risks so that you can take appropriate action when needed. The auto industry is cyclical, which means its performance often correlates to the overall economy. During recessions, sales of new cars decline while demand for used cars increases. Auto stocks are also highly volatile because they depend on consumer sentiment and industry trends, which change frequently. So it’s important to diversify your portfolio with other types of investments when you decide to buy auto stocks. Plus, remember that there’s always a risk that an automaker will go bankrupt and default on its debts, which could mean that your funds are lost forever if you don’t have adequate protection in place against this possibility.

To protect yourself from making wrong choices, it is advisable to research the current top Auto stocks in India and choose the one that best fits your financial goals and portfolio situation.

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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