Auto stocks to BUY: The Nifty Auto index, which tracks the performance of India's automobile sector, rose nearly 1 per cent on Monday, April 27, reflecting improved investor confidence in auto stocks for the day.

Despite this gain, the sector has shown some weakness in the near term. Nifty Auto has slipped across shorter timeframes such as one week, three months, and six months, indicating recent pressure on auto counters.

However, the longer-term trend remains firmly positive. The index has delivered consistent gains over one-year, three-year, and five-year periods, highlighting the sector's strong structural growth story despite short-term volatility.

Nifty Auto Returns

Here's a look at Nifty Auto's performance across different timeframes:

Even amid recent weakness, brokerages remain optimistic about the sector's outlook. Global brokerage Nomura has maintained a positive stance on auto stocks and has also shared stock-specific recommendations along with target prices for several companies in the space.

Brokerage on Auto Stocks

Nomura has maintained its positive outlook on the automobile sector, with a strong preference for select passenger vehicle (PV) and auto-related stocks. Among passenger vehicle makers, the brokerage continues to maintain a Buy rating on Mahindra & Mahindra (its top pick) and Hyundai Motor India.

While on the auto component players' side, Nomura believes the rising electric vehicle (EV) mix will be a key positive for Sona BLW Precision Forgings (Sona Comstar), while higher vehicle content per unit is expected to benefit UNO Minda.

The brokerage highlighted that the SUV mix increased further in the fourth quarter, led by strong demand for large SUVs. It expects this trend to continue, supported by shifting consumer preferences and the ongoing electrification of the passenger vehicle segment.

Nomura noted that both industry growth and the evolving product mix remain broadly in line with its expectations following the GST cuts.

Based on recent dealer checks in Uttar Pradesh, the brokerage found strong demand for both passenger vehicles and two-wheelers, with no visible impact on consumer sentiment from the West Asia conflict. It also observed significantly higher consumer interest in owning electric vehicles.

Looking ahead, Nomura expects SUV penetration to continue rising. However, it also cautioned that cost pressures and the impact of price hikes are likely to become more visible in Q1 and Q2 of FY27.

Among segments, commercial vehicles (CVs) and two-wheelers (2Ws) are seen as better positioned to pass on rising costs, while passenger vehicle makers may face higher competitive intensity.

Auto Stocks Share Price Target 2026

On the stock-specific front, the brokerage expects meaningful upside across select auto names, with potential gains of up to X per cent from current levels. Nomura remains bullish on auto stocks, maintaining Buy ratings on Mahindra & Mahindra, Hyundai Motor India, TVS Motor Company, Ather Energy, Sona BLW Precision Forgings, and UNO Minda.

Here's a list of the stocks along with their respective target prices:

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)

Read more news like this on www.etnownews.com