Drive your portfolio: Three large-cap auto stocks to watch now
With strong festival season demand, rising EV plans, and robust financials, these auto giants are steering investors toward potential growth—here’s where to look
On Tuesday, auto stocks revved higher, fuelled by strong bookings on the first day of the Navaratri festival and the rollout of rationalised Goods and Services Tax (GST) rates. This surge reflects not just seasonal demand, but also growing consumer confidence in India’s automobile sector.
For investors seeking stable returns with lower risk exposure, large-cap auto stocks are particularly appealing. With strong balance sheets, market leadership, and proven resilience, these companies can offer a steadier ride than their smaller peers.
Here are three large-cap auto stocks worth adding to your watchlist:
Eicher Motors
Eicher Motors, a flagship of India’s Eicher Group, is a global leader in middleweight motorcycles through its iconic Royal Enfield brand and key player in the country's automobile sector. Popular models like the Classic, Bullet, and Himalayan have cemented Royal Enfield as a household name in over 60 countries.
Beyond motorcycles, the company sells protective riding apparel, urban casual wear, and accessories. It also operates a joint venture with Sweden’s AB Volvo—Volvo Eicher Commercial Vehicles Ltd (VECV)—covering trucks, buses, auto components, and technical consulting services.
Eicher reported strong performance for Q1FY26, with revenues rising to ₹44,397 million from ₹42,436 million a year ago. Net profit surged to ₹9,607 million from ₹7,810 million year-on-year (YoY). The company also posted its highest-ever Q1 revenue from operations at ₹50.4 billion, up 14.8% from ₹43.9 billion previously. Net profit grew to ₹12.1 billion, driven by record vehicle sales across Royal Enfield and VECV.
Looking ahead, Eicher Motors plans to enter the electric motorcycle market with its first offering, the ‘Flying Flea’, signalling a strategic push into electric vehicles (EVs) alongside its robust traditional business.
Tata Motors
Tata Motors, part of the Tata Group, is a leading global auto manufacturer, with notable subsidiaries and joint ventures including Jaguar Land Rover and Tata Daewoo.
In Q1 FY26, Tata Motors reported revenues of ₹1,044 billion, slightly down from ₹1,071 billion last year, while net profit fell to ₹38,710 million from ₹55,870 million YoY.
The company plans a strategic demerger to separate its commercial vehicle (CV) and passenger vehicle (PV) businesses into two independent, publicly listed entities. This move aims to unlock shareholder value by creating focused, agile companies positioned for long-term growth.
Tata Motors intends to invest ₹330–350 billion during FY26–30 on new product launches, technology upgrades, powertrain enhancements, and software-driven vehicles (SDVs), with ₹160–180 billion earmarked for the EV division alone.
Maruti Suzuki
Maruti Suzuki Ltd, founded in 1981 as a joint venture between the Indian government and Japan’s Suzuki, continues to lead India’s car market with affordable, fuel-efficient vehicles that appeal to a broad spectrum of consumers. Its extensive sales and service network, spanning both urban and rural areas, ensures easy accessibility and strong after-sales support.
The company’s business is structured across several key segments. Passenger vehicles (PVs) remain its core, contributing around 85% of volumes and encompassing hatchbacks, sedans, and SUVs. Within PVs, the CNG segment is growing, accounting for roughly a third of domestic sales. Light commercial vehicles make up a small 2% of volumes, while exports contribute around 12–13% of total sales.
In Q1FY26, Maruti reported revenue of ₹384.1 billion, up 8% from ₹355.3 billion a year ago, while net profit rose 2% to ₹37.1 billion. Non-operating income nearly doubled during the quarter, providing an additional boost to the bottom line.
Looking ahead, Maruti has laid out ambitious plans to strengthen its market leadership and expand into electric mobility and sustainable technologies. The company is targeting a 50% share of India’s automobile market and aims to increase annual production capacity to four million units, with a focus on boosting exports alongside domestic growth.
Conclusion
With the automotive sector undergoing a major transformation—driven by rising domestic demand, growing exports, and the shift toward Electric Vehicles (EVs) and Software-Defined Vehicles (SDVs)—large-cap auto stocks stand out as a smart option for investors.
Their strong track record, market leadership, and ability to adapt to change make them a reliable way to participate in the industry’s growth.
For anyone looking to invest thoughtfully while keeping risk in check, keeping an eye on large-cap auto stocks could be practical and rewarding.
However, investors should remain cautious of market volatility and sector-specific challenges while making investment decisions.
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
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