Auto stocks in Indian stock market have remained in limelight lately amid ongoing India-US trade deal and US Fed rate cut expectations.
Amid the persistent tariff uncertainty that has dampened investor sentiment, auto stocks are standing out as a positive exception. With minimal reliance on exports, the sector remains largely insulated from the direct effects of higher US tariffs, while multiple domestic factors continue to lend support.
In August, in a significant reform, the government streamlined Goods and Services Tax (GST) rates for the automobile industry, spanning two-wheelers, cars, tractors, buses, trucks, and auto components. The move is aimed at lowering consumer prices, boosting demand, creating jobs, and enhancing India’s role as a global manufacturing hub.
“Auto companies are a rate-sensitive segment, and they are expected to react to any rate cuts announced by the US Fed next week because it would set the tone for the RBI rate cut in the next MPC meeting. Additionally, Donald Trump’s nominee hinting at Donald Trump’s visit to India by November 2025 is expected to ease Trump’s tariff tension, which is also a positive development for the auto sector stocks,” said Anuj Gupta, Director, Ya Wealth Research & Advisory.
Auto stocks to buy
Anuj Gupta of Ya Wealth recommended investors to keep a track on Eicher Motors, Tata Motors, TVS Motor, Bajaj Auto, JBM Auto, Bosch, Amara Raja, Exide Industries, and UNO Minda shares for value picks.
On the other hand, Seema Srivastava, Senior Research Analyst at SMC Global Securities, has suggested investors to buy Ashok Leyland shares to buy. “Ashok Leyland likely to be a wise and safe buy for investors willing to accept short-term trade risks,” Srivastava said.
“The India-US trade deal buzz and anticipated US Federal Reserve rate cut are significant economic events that could impact Ashok Leyland’s performance. A potential trade deal could ease export difficulties, benefiting Ashok Leyland, while a US Fed rate cut might improve liquidity and boost auto demand in India through lower financing costs. Comparatively, Ashok Leyland’s strong market position, diverse product portfolio, and robust financial performance make it an attractive investment option.
Comfortable valuation, Market leadership, robust financial performance, and diverse product offerings likely to support further growth of the Company.
Moreover expansion into emerging markets, electric vehicle segment, and potential trade deal benefits likely to benefit too,” she added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
