Nomura’s latest research note, released on Tuesday, slashes through the noise by flagging auto firms with high electric‑vehicle exposure as the next growth engine for the second half of FY24 and the full FY25. The brokerage cites comparable EV product lines and established technology as the differentiators that will let these OEMs outpace the broader sector.
Ather Energy, Mahindra & Mahindra and Hyundai Motor India are the trio of buy picks, each backed by a higher EV penetration trajectory. While Ather’s stock dipped 2.4% on the NSE, Mahindra & Mahindra gained 0.9% and Hyundai Motor India climbed 1.0% on the same day, reflecting the mixed market sentiment toward EV‑oriented OEMs. Tata Motors’ PV unit remains neutral, signalling that its EV market share growth is still under scrutiny.
Nomura extends its bullish stance to the supplier side, giving a buy rating to Sona BLW Precision Forgings for its higher EV powertrain content and to Exide Industries following the launch of its NMC cell plant in September 2026. These moves underline the belief that the EV shift will lift content and pricing power across the supply chain.
CLSA, on the other hand, points to a 17% correction in the Nifty Auto index over the past two months as the backdrop for its risk‑reward assessment. Despite the pullback, CLSA argues that several OEMs trade at compelling valuations even when factoring commodity‑inflation drag and post‑GST growth normalization. M&M receives a high‑conviction outperform call from CLSA, reinforcing the theme that EV‑focussed firms are positioned for upside.
Market reaction on Tuesday saw the Nifty Auto index hold steady, with a 7‑to‑8 winner‑loser split. Ather Energy, Tata Motors and Sona BLW Precision Forgings posted losses ranging from 0.6% to 2.4%, while Mahindra & Mahindra and Hyundai Motor India recorded gains of 0.6% to 1.0%. The flat index suggests that investors are still weighing the long‑term upside of EV penetration against short‑term volatility.
Looking ahead, the consensus is that EV penetration will be the key lever for auto‑sector returns in the coming years. Investors should keep an eye on commodity‑inflation trends, valuation re‑pricing, and the pace at which OEMs and suppliers scale EV‑specific technologies. The next quarter’s earnings will be the first real test of Nomura’s thesis, with analysts watching EPS margins and revenue mix shifts closely.