Every so often, circumstances align to produce an exciting time for investment in a specific industry. Of late, this has been the case in India about the auto industry.
Growing businesses, thriving companies, and the gradual embrace of new technology have helped the automobile and transportation businesses to grow in recent years. Notably, a late-2022 analysis of auto sector investment in India indicated that automotive market capex – essentially, the capital companies use on acquisitions – was projected to grow by 24% year-over-year in 2023.
That number alone was a strong indication of the amount of growth, change, and opportunity occurring in the auto sector. Specifically, the positive momentum was attributed to the emergence of autonomous vehicles, growing digital auto sales, wireless technology and connected cars, greater penetration of electric vehicles (EVs), and government policy shifts designed to accommodate manufacturing and supply chain changes.
While those changes account for greater government and business investment in auto-related ventures, it is also important to note that India is seeing a greater focus on online investment by individual consumers as well. During and following the pandemic, many throughout the country have been driven to seek alternative income streams from the comfort of their own homes. At the same time, younger generations who are already inclined to seek and latch onto such opportunities online have increasingly come of age and begun planning for their financial futures.
The ability to conduct an online trade on a reputable app or internet platform appeals to old and young investors alike. Even beyond meeting the basic needs of those seeking alternative income or planning for their futures, internet-based trading services offer broad access to popular markets and stocks, as well as up-to-date pricing and instantaneous trade execution. For these reasons, they have become quite popular, and several of them have reported spikes in trading activity in recent years.
What this all amounts to is an ideal climate for private investment in the auto industry. The industry itself is demonstrating clear and multi-faceted signs of growth, and at the same time, expanding online trading options have engaged waves of new private investors in India. Those investors would do well to explore opportunities in the auto sector. And with that in mind, we’re going to take a look at some of the best car- and transportation-related stocks to invest in today.
1. Tata Motors Ltd.
Based in Mumbai as part of the Tata Group, Tata Motors Ltd. It is estimated to be worth USD 37 billion as of this writing. The company is a full-scale auto manufacturer producing cars, trucks, buses, SUVs, and even defence vehicles. Tata Motors Ltd. also serves as an umbrella of sorts, with several other car companies operating under its ownership. These include the likes of Jaguar Land Rover Automobile PLC, Tata Motors European Technical Centre PLC, Trilix Srl., and Tata Daewoo Commercial Vehicle Company Limited, to name a few.
As an investable asset, the Tata Motors Ltd. stock has performed well for quite some time now. Listed at 634.20 INR as of this writing, it is up 153.33% over the past five years and 46.64% in the last year alone. The stock may also be positioned to see additional boosts in the years ahead, with a substantial rollout of multiple EVs (namely, four brand-new SUV models) in the works.
2. Bajaj Auto
Based in Pune, Bajaj Auto is not actually a company that focuses on automobiles. It does produce automotive vehicles, however, with a particular emphasis on motorcycles, scooters, and 3-wheelers. The company has nearly 90 million customers to date and has exported its motorcycles to more than 70 countries around the world.
Worth 5,149 INR at the time of this writing, Bajaj Auto’s stock is up 83.95% over the past five years and 39.56% in the last year alone. For that matter, the share price has risen by over 35% in just the last six months. This growth has been attributed largely to high expectations regarding the company’s revenue from automotive scooters in the coming years. The company is also promoting an ongoing investment in EVs, with both 2- and 3-wheel electric vehicles in the works.
3. Mahindra & Mahindra Ltd.
Established in Mumbai in the 1940s, Mahindra & Mahindra has become one of India’s most prolific vehicle manufacturers. The company specialises in passenger and commercial vehicles, with a lineup that includes SUVs, pick-up trucks, larger trucks, buses, rickshaws, electric rickshaws, electric sedans, and electric SUVs. At this time, Mahindra & Mahindra Ltd.’s share price is listed at 1,600.05 INR, up 66.69% over five years and 27.99% in the last 12 months.
Beyond being a large and influential company with a high-value share price, Mahindra & Mahindra is also worth a look because the company has specifically projected optimism about its upcoming ventures. M&M is aiming to expand its activity with clean technology and EVs, and while there is some concern that global semiconductor shortages could stall these kinds of initiatives, the Mahindra & Mahindra Executive Director has gone out of his way to reassure investors. In a 2022 auto industry report, the director argued that his company would maintain its sales momentum –– and so far he’s been proven right.
4. Eicher Motors
Eicher Motors was founded in 1948 and is based in New Delhi. Another of India’s preeminent automotive companies, Eicher primarily oversees two brands: Royal Enfield, known for motorcycle production, and VE Commercial Vehicles, which makes trucks and buses for shipping and business use.
At the time of this writing, the Eicher Motors stock is worth 3,422 INR. That price is up 22.48% over a five-year span; it is actually down slightly over the last year alone but has risen by 12.73% in the past six months, indicating that its long-term trajectory remains positive. Like some of the other companies listed here, Eicher Motors is worth keeping a close eye on when it comes to potential business expansion due to EV initiatives. Through VE Commercial Vehicles, it has recently announced a partnership with Amazon to produce electric trucks for commercial use.
These are not the only auto industry stocks worth keeping an eye on. For now, though, we hope they’ve given you a stronger sense of how and where to explore investing in the automotive world. With the industry surging and online trading opportunities attracting more and more investors, there is a significant opportunity to be seized in this space.
Conclusion
These carefully selected Indian car stocks offer a compelling investment opportunity, backed by the country’s growing automotive industry and economic resilience. Consider these options for a potential boost to your investment portfolio.
