Siddhartha Khemka Recommends Maruti Suzuki and Samvardhana Motherson Amid Mixed Auto Sector Trends
Bullish on autos? Siddhartha Khemka picks Maruti Suzuki and Samvardhana Motherson
Image: The Economic Times
India's automobile sector shows mixed trends as passenger vehicles thrive while two-wheelers and commercial vehicles face challenges. Siddhartha Khemka recommends buying shares of Maruti Suzuki and Samvardhana Motherson, citing strong demand and growth potential in these companies.
- 01Passenger vehicles (PVs) are experiencing robust demand, particularly in utility vehicles and new models, with a strong order backlog of ~190,000 vehicles for Maruti Suzuki.
- 02Samvardhana Motherson reported a 55% year-on-year increase in adjusted profit after tax for Q4 FY26, driven by strong performance in wiring harnesses and integrated assemblies.
- 03Maruti Suzuki's revenue grew approximately 28% year-on-year in Q4, with expectations of around 10% domestic volume growth in FY27 due to capacity expansion and sustained demand.
- 04The tractor segment remains strong due to healthy rural demand, though rising farm input costs and weather-related risks could temper growth in the second half of the fiscal year.
- 05Commercial vehicles are facing challenges from geopolitical tensions and demand softness, particularly in the medium and heavy segments.
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The Indian automobile sector has entered FY27 with mixed signals. While the passenger vehicle segment continues to thrive, buoyed by strong retail demand and new model launches, two-wheelers and commercial vehicles are facing headwinds due to external factors and changing market dynamics. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, recommends buying shares of Maruti Suzuki and Samvardhana Motherson. Maruti Suzuki is benefiting from a robust order backlog of approximately 190,000 vehicles and a strong revenue growth of about 28% year-on-year in Q4 FY26. The company is expected to achieve around 10% domestic volume growth in FY27. Meanwhile, Samvardhana Motherson has shown a 55% increase in adjusted profit after tax in Q4 FY26, with a strong business pipeline and expansion into high-growth sectors. However, the outlook for commercial vehicles remains cautious due to geopolitical tensions affecting freight activity and overall market uncertainty. The tractor segment is still performing well, supported by favorable rural conditions, but rising costs and potential weather issues could impact future demand.
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The recommendations for Maruti Suzuki and Samvardhana Motherson could influence investor sentiment and market dynamics in India's automobile sector.
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