Auto sales growth to moderate after festive season, says Monarch Networth Capital
The brokerage expects passenger, commercial, and two-wheeler vehicle growth to slow in the second half of FY27.
Auto sales growth for passenger vehicles, commercial vehicles, and two-wheelers is expected to slow down in the second half of FY27, according to a report by Monarch Networth Capital (MNCL) published by The Economic Times.
The brokerage noted that the industry faces a high base following strong demand during the festive season. MNCL also expects tractor sales to remain weak due to ongoing pressure in the farm equipment segment.
Sahil Sanghvi, VP of Institutional Research at MNCL, said that while overall four-wheeler sales growth is expected to moderate once the festive period ends, the industry will be watched for inventory levels and order backlogs.
In October 2026, the commercial vehicle segment saw growth, with Force Motors increasing volumes by 45 per cent, Volvo Eicher by 35 per cent, Tata Motors by 27 per cent, and M&M by 17 per cent.
MNCL prefers diversified auto ancillary companies with multiple growth drivers. The brokerage has issued a Buy rating for Minda Corporation, RK Forgings, and Sundram Fasteners, with target prices of Rs 985, Rs 805, and Rs 1,315, respectively.
Minda Corporation is expected to grow through increased content per vehicle, while RK Forgings may benefit from new orders and Sundram Fasteners from export orders and non-automotive diversification.