Eicher Motors, Hyundai and Tata Motors’ passenger vehicle business are Nuvama Institutional Equities’ top picks in the auto sector ahead of Diwali 2026, as the brokerage favours automakers with new product launches and healthy waiting periods. However, it expects vehicle volume growth to moderate in the second half of FY27 as festive demand shows signs of slowing after a strong first half.
Initial festive-season registrations since Navratri have been mixed. Commercial vehicle (CV) registrations grew 21% year-on-year (YoY), while two-wheeler (2W) registrations rose 13%. Passenger vehicle (PV) registrations, however, declined 9% YoY. Festive-season performance has also lagged the over 20% growth recorded across categories in the first half of FY27.
Dealer checks across Madhya Pradesh, Bihar and Jharkhand indicate moderating demand due to a high base following last year’s GST cuts, intermittent weakness in rural demand, and longer waiting periods, particularly for passenger vehicles. Meanwhile, electric vehicle (EV) adoption continues to grow at a robust double-digit pace across segments.
Among two-wheelers, TVS Motor and Honda have gained market share, while Bajaj Auto, Hero MotoCorp and Eicher Motors have lost share. Nuvama attributed Eicher Motors’ share loss to waiting periods for key models, including the Bullet 350 and Classic 350.
The brokerage’s dealer survey indicates that a Madhya Pradesh Honda dealer expects growth of 3–5% during September–November 2026, compared with 10% in the first half of FY27, citing slower rural demand amid deficient rainfall and lower crop realisations. A Bihar dealer expects Honda’s two-wheeler sales to grow 15–18% during the festive period, below the 24% growth recorded between April and August 2026.
For Hero MotoCorp, a Jharkhand dealer expects festive-season growth of 10%, compared with 12% in the first half of FY27. Rural demand is likely to remain healthy in the state due to normal rainfall.
Passenger vehicle demand remains mixed
Nuvama’s checks with passenger-vehicle dealers in Madhya Pradesh and Bihar also indicate uneven festive demand. A Bihar-based Maruti Suzuki dealer expects growth of 18% during September–November 2026, compared with 8% between April and August. The dealer reported a one-month waiting period for the Brezza and Fronx, along with a low inventory of around 20 days.
In contrast, a Hyundai dealer in Madhya Pradesh expects muted growth during the festive season, compared with 10% growth in the first half of FY27. Nuvama said new launches, including the Bayon, could support volumes, with the model carrying a waiting period of around one month.
Meanwhile, EV demand remains resilient. An Ather Energy dealer in Madhya Pradesh reported waiting periods of 30 days for the Rizta model and 15 days for the Konarc, although growth could remain moderate until supplies improve in the fourth quarter of FY27.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
