Jefferies is positive on the Indian automobile sector and its big bets include M&M, Eicher Motors and TVS Motor. The brokerage firm expects volumes of two-wheelers and tractors to grow at 13-15% CAGR over the next two fiscal years. Further, it believes that the volumes of two-wheelers and tractors will outpace that of passenger vehicles and trucks during the same time frame.
M&M
The brokerage firm has a ‘Buy’ call on the stock with its target price raised to Rs 4,075 per share from Rs 3,700. That implies there is a room for 30% upside from current levels. The stock has given a return of 2.2% in the past one month.
M&M has revealed the prices of Mahindra XEV 9e and BE 6. The fully-loaded Pack Three variant with the 79 kWh battery of the Mahindra XEV 9e is Rs 30.90 lakh and the top-spec Pack Three trim of the BE 6 is Rs 26.9 lakh (both prices ex-showroom. Also, the company’s overall auto sales for December 2024 stood at 69,768 vehicles, a growth of 16%, including exports. Specifically, the tractor sales for December 2024 were up 10% YoY. In terms of retail sales, M&M is one of the highest tractor sellers with a market share of around 30%.
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The other key tractor play that Jefferies is betting on is Eicher Motors. It has given a ‘Buy’ rating on the stock with a target price of Rs 6,600 per equity share, which is 20% higher than the earlier target of Rs 5,500. The Eicher Motors stock’s current market price is still almost 28% away from the target price. The stock has risen 5.8% in the last five trading days and 6.4% in the past one month.
The company has clocked robust tractor sales in December, up over 23% YoY. Moreover, Eicher’s two-wheeler segment, Royal Enfield is gearing up to launch new motorcycles in the Indian market in 2025,
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