Why invest in the best automobile stocks? Investing in auto sector stocks is an appealing option for investors seeking security and growth prospects. These companies present a good opportunity for investors looking to profit from a significant portion of global commerce due to the industry’s resilience to economic swings and the ongoing need for transport solutions. Here is a detailed overview of the best automobile stocks to buy in 2025.
What are Automobile Stocks?
Automobile stocks are shares of publicly listed companies that distribute, manufacture, or sell automobiles and their related parts. India ranks third globally in automobile volume sales after China and the US. In terms of production volume, India holds the position of being the largest tractor producer, the 2nd largest bus manufacturer, and the 3rd largest heavy truck manufacturer globally.
The automobile sector contributes nearly 6% to India’s GDP, making it a potential investment sector to be part of India’s growth story. Apart from this, the auto components sector also had a notable share of 2.3% in India’s GDP. This sector includes engine parts, braking systems, electric components, tyres, etc. By investing in automobile stocks, you also get a chance to invest in a broader spectrum of auto component makers and auto exporters.
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Top 10 Automobile Stocks to Invest in 2025
Here is a comprehensive compilation of the most promising stocks to invest in 2025.
- Maruti Suzuki India Ltd
- Mahindra & Mahindra Ltd
- Tata Motors Ltd
- Bajaj Auto Ltd
- Hyundai Motor India Ltd
- Eicher Motors Ltd
- TVS Motor Company Ltd
- Hero MotoCorp Ltd
- Ashok Leyland Ltd
- Escorts Kubota Ltd
Overview of Best Automobile Stocks to Invest in India
1. Maruti Suzuki India Ltd
India’s largest passenger car manufacturer, Maruti Suzuki India Limited (MSIL), is a subsidiary of Japan’s Suzuki Motor Corporation. The country’s automotive revolution is said to have been started by Maruti Suzuki. Started with a humble beginning of the Maruti 800 car, today it has a wide portfolio of 16 car models with more than 150 variants.
2. Mahindra & Mahindra Ltd
The Mahindra Group’s company, Mahindra & Mahindra (M&M), produces mobility products and agriculture solutions. It was founded by Ghulam Mohammad and two Brothers, KC Mahindra & JC Mahindra in 1945. Along with automobile and farm equipment, its portfolio is diversified into technology services, financial services, real estate, and logistics business.
3. Tata Motors Ltd
Tata Motors is a well-known producer of automobiles, buses, tractors, and trucks. Its journey started in the year 1945 as the Tata Engineering and Locomotive Company (TELCO). Today, it is the third-largest car manufacturer and the largest EV manufacturer in India.
4. Bajaj Auto Ltd
Part of the Bajaj Group, this company is a known player in the automobile industry. It is India’s top motorcycle exporter, with 2 out of 3 bikes sold globally being Bajaj. It is the first 2-wheeler and 3-wheeler company in the world that have reached a market cap of ₹1 trillion.
5. Hyundai Motor India Ltd
Hyundai Motor India is a subsidiary of South Korea’s Hyundai Motor Company. It started in India in 1996, with operations from the Santro hatchback. Currently, it holds 15% market share in India’s car market. The company sells 13 car models in India, including the Creta and Grand i10 Nios hatchback.
6. Eicher Motors Ltd
Eicher is the parent company of Royal Enfield and an industry leader in the mid-sized motorcycle market for engines ranging from 350cc to 650cc. It also operates a joint venture with Volvo Group, VE Commercial Vehicles Limited (VECV). Through this, the company manufactures a wide range of Eicher-branded trucks and buses, and Volvo buses.
7. TVS Motor Company Ltd
TVS Motor is ranked in the third position in 2-wheeler manufacturing in India. With an annual 2-wheeler production capacity of 4.95 million, its footprints are also expanded to the Middle East, Africa, Latin and Central America. It also has a 3-wheeler production capacity with an annual capacity of 2,40,000.
8. Hero MotoCorp Ltd
The largest two-wheeler manufacturer in the world, Hero MotoCorp, has a strong presence in 48 countries. Incorporated in 1984 as Hero Honda Motors, it achieved the milestone of 100 million cumulative sales in 2021. It also ventured into the electric scooter market with the launch of its brand “Vida” in 2022.
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9. Ashok Leyland Ltd
Located in Chennai, Ashok Leyland is a global automobile manufacturing company based in India. The Hinduja Group is the current owner of it. In India’s commercial vehicles market, it is ranked as the second-largest manufacturer. In this industry, it also has the biggest and fastest-growing customer networks with 52,863 touchpoints.
10. Escorts Kubota Ltd
Escorts Kubota specializes in farming tractors, construction equipment, and railway equipment. It has 6 manufacturing plants and has manufactured more than 94,000 tractors. It also exports the products to more than 62 countries, including the UK, France, Germany, Egypt, etc.
Latest Performance of Top 10 Automobile Stocks
Here is the performance of the top 10 automobile stocks, which you can explore in 2025:
| Company Name | CMP (₹) | Mar Cap (₹ Cr) | 3 Yr Returns (%) | P/E | EPS TTM (₹) | ROCE (%) | ROE (%) | Div Yld (%) |
|---|---|---|---|---|---|---|---|---|
| Maruti Suzuki India Ltd | ₹12,310 | ₹3,86,903 | 55.24% | 26.7 | ₹461.20 | 21.8% | 16.0% | 1.01% |
| Mahindra & Mahindra Ltd | ₹2,997 | ₹3,72,686 | 214.61% | 28.8 | ₹103.97 | 14.1% | 18.0% | 0.70% |
| Tata Motors Ltd | ₹718 | ₹2,64,302 | 67.12% | 11.1 | ₹62.02 | 20.0% | 23.6% | 0.84% |
| Bajaj Auto Ltd | ₹8,848 | ₹2,47,134 | 130.86% | 32.8 | ₹269.80 | 33.5% | 26.5% | 0.90% |
| Hyundai Motor India Ltd | ₹1,881 | ₹1,52,868 | 8.85% (3-M) | 27.9 | ₹69.41 | 54.2% | 42.2% | 1.12% |
| Eicher Motors Ltd | ₹5,331 | ₹1,46,058 | 94.25% | 30.8 | ₹172.69 | 29.8% | 24.1% | 0.96% |
| TVS Motor Company Ltd | ₹2,804 | ₹1,33,174 | 287.11% | 60.3 | ₹47.06 | 19.4% | 28.9% | 0.36% |
| Hero MotoCorp Ltd | ₹4,366 | ₹87,307 | 60.39% | 20.0 | ₹218.91 | 31.2% | 23.7% | 2.64% |
| Ashok Leyland Ltd | ₹238 | ₹70,057 | 70.09% | 22.6 | ₹10.58 | 14.4% | 29.2% | 2.62% |
| Escorts Kubota Ltd | ₹3,371 | ₹37,712 | 107.4% | 33.5 | ₹112.30 | 14.0% | 11.5% | 0.53% |
*(Data as on May 28, 2025)
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Advantages and Risks Associated with Investing in Automobile Stocks
If you want to diversify your portfolio as well as make money in this dynamic market, investing in automobile stocks has the following benefits:
- Exposure to long-term growth powered by the global demand for automobiles can be obtained by investing in widely recognised automobile companies.
- Automobile manufacturers are appealing to income investors since many of them pay dividends to their stockholders.
- As the industry advances, it might be profitable to invest in businesses that are leading revolutionary changes.
Prominent automakers operate and sell their vehicles across several nations, exhibiting a worldwide reach, which may lower the risk caused by regional economic swings. - Investment risks in automobile stocks include market cyclicity, regulatory changes, competition, and supply chain disruptions.
Why Should You Invest in Automobile Stocks in India?
Certain important policies in place that will give the automotive sector a competitive advantage in the future are as follows:
- Production Linked Incentive (PLI) Scheme: PLI Scheme for Automobile and Auto Component Industry and PLI Scheme for Advanced Chemistry Cell intend to improve the automobile industry by incentivising manufacturers.
- FAME Scheme (Phase II): This scheme was implemented on April 1, 2019 for a five-year period with a budgetary allocation of ₹11,500 crores. This scheme incentivised electric two-wheelers, 2-wheelers, 4-wheelers, and EV charging stations.
- PM E-DRIVE Scheme: The PM Electric Drive Revolution in Innovative Vehicle Enhancement Scheme was announced in September 2024 with an allocation of ₹10,900 crores. It is a two-year scheme to support the growth and innovation in the EV industry.
How to Start Investing in Automobile Stocks?
SMC, your dedicated ally in navigating the complexities of the financial realm, transforms your investment journey into an enriching experience within the Automobile stocks domain.
Here are three easy steps to start investing in automobile stocks :
- Go to the SMC Global Securities website or simply download the SMC ACE App.
- Open a free demat account
- Start investing
Conclusion
India’s strong and growing middle class has made the two-wheeler category the country’s largest vehicle market in terms of volume. The automobile industry stocks in India provide a promising future. Still, it is important to examine the top automobile stocks in India right now and select the one that most closely matches your portfolio circumstances and financial objectives to avoid making bad decisions.
Author: All Content is verified by SMC Global Securities.
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