For Maruti Suzuki, the quarter may look flat as higher discounts, post-GST price adjustments, and new model ad spends (for the Victori’s launch) could slightly reduce margins. Mahindra & Mahindra (M&M) is likely to show steady growth, but higher promotional costs and a larger EV mix could trim profitability. Hyundai seems better placed—its premium models and UVs (utility vehicles) are helping offset festive ad spending and promotional offers.
Ashok Leyland is expected to post a stable quarter with steady margins and modest growth, while markets will closely watch its outlook on truck demand in the second half of the year. Tata Motors, however, faces a tougher phase. Production at JLR (Jaguar Land Rover) was disrupted by a cyber incident, and although some tariff relief came in late September, challenges remain due to weak motorcycle demand, higher incentives in the US, and competition in Europe and China.
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The two-wheeler space looks bright this quarter with around 15% volume growth, driven by strong local demand and recovering exports. Margins are expected to expand by 40–80 basis points compared to the previous quarter. Bajaj Auto is benefiting from a favourable currency and improving export markets in Africa and Latin America. Eicher Motors should see better margins as sales of its Classic 350 and Shotgun 650 models rise, while TVS Motor is expected to post stronger margins thanks to a more premium product mix and a growing EV lineup.
The story is less upbeat for auto parts manufacturers. Global production weakness and tariff uncertainties are weighing on results. Companies like Bharat Forge and Samvardhana Motherson are likely to report muted earnings with visible EPS downgrades. However, many of these firms are focusing on long-term opportunities beyond autos — such as defence electronics and strategic acquisitions — to drive future growth.
Q2FY26 is shaping up to be a noisy but telling quarter. The numbers may look mixed, but the commentary from companies will matter more than the reported results. While the full benefit of GST-led price cuts and festive demand may show up only later, this quarter sets the stage for a stronger second half of FY26.Jay Kale, Executive Vice President – Research at Elara Capital, believes the next phase of stock performance in autos will depend on which companies gain market share. His top OEM picks are Maruti Suzuki, TVS Motor, and Mahindra & Mahindra (M&M).
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Kale expects the market to look past Q2 numbers, as upbeat Diwali commentary from automakers like Maruti and Hyundai has already set a positive tone. He said the festive season growth of around 15% is largely priced in, and investors will now focus on market share winners.
He sees Maruti benefiting from first-time buyers, TVS Motor from strong two-wheeler momentum, and M&M from higher ASPs driven by upgrade demand. Festive sales are estimated to be up about 20% year-on-year, with overall season growth trending in low to mid double digits.
From December to March, Kale expects growth to moderate but stay healthy, 5–6% for passenger vehicles and 10–11% for two-wheelers. In ancillaries, he prefers selective exposure to firms linked to PVs and 2Ws, naming Uno Minda, Gabriel India, Minda Corporation, and Sona BLW as top picks.
For the entire interview, watch the accompanying video
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