Best Automobile Stocks in September 2024 – Based on 5Y CAGR

Historically, the Indian automobile industry has been a good indicator of the economy’s performance, as the automobile sector plays a key role in both macroeconomic expansion and technological advancement. The total production of passenger vehicles, three-wheelers, two-wheelers, and quadricycles was 23,58,041 units in April 2024. 

The Indian passenger car market was valued at US$32.70 billion in 2021, and it is expected to reach a value of US$54.84 billion by 2027 while registering a CAGR of over 9% between 2022 and 27. The global EV market was estimated at approximately US$250 billion in 2021, and by 2028, it is projected to grow by five times to US$1,318 billion. In this blog, we will explore the best automobile stocks in September 2024 based on 5Y CAGR.

Best Automobile Stocks in September 2024 – Based on 5Y CAGR

Note: The above-mentioned automobile stocks are from the auto sector with a market capitalisation of over ₹10,000 Crore and sorted based on 5Y CAGR as of September 19, 2024.

Overview of 5 Automobile Stocks

• Tata Motors  Limited: Tata Motors Group offers a wide and diverse portfolio of cars, sports utility vehicles, trucks, buses, and defence vehicles worldwide. The company has operations in India, the UK, South Korea, South Africa, China, Brazil, Austria and Slovakia. During Q1 FY25, JLR recorded an EBIT margin of 8.9%, which reflects higher wholesales and material cost improvement offset partially by VME, FMI and selling costs. 

Key Metrics:

• Return on Equity (ROE): 49.4%
• Return on Capital Employed (ROCE): 20.1%
• TVS Motor Company Ltd: TVS Motor Company Ltd (TVSM) manufactures two-wheelers and accessories, including a wide range of two-wheelers and three-wheelers. During Q1 FY25, the company’s operating revenue soared 16% to ₹ 8,376 crore as against ₹7,218 crore in Q1 FY24. Two-wheeler domestic ICE sales rose 14% compared to Q1 FY24.

Key Metrics:

• ROE: 26.6%
• ROCE: 14.7%
• Mahindra & Mahindra Ltd: Mahindra & Mahindra Ltd is one of the most diversified automobile companies in India, with a presence in 2-wheelers, 3-wheelers, PVs, CVs, tractors, and earthmovers. Mahindra & Mahindra reported strong operating performance across businesses in Q1 FY25. Market share gains and continued margin expansion for Auto and Farm, while profits rose 18%.

Key Metrics:

• ROE: 18.4%
• ROCE: 13.6%
• Bajaj Auto Ltd: Bajaj Auto is a two-wheeler and three-wheeler manufacturer that exports to 79 countries in Latin America, Southeast Asia, and many more. During FY24, Revenue touched an all-time high ₹44,685 crore, up 23% year-on-year, arising from the record sales of both vehicles and spares.

Key Metrics:

• ROE: 9.61%
• ROCE: 7.67%
• Maharashtra Scooters Ltd: Maharashtra Scooters Ltd. (MSL) is a manufacturing & and an unregistered core investment company. It is engaged in the business of manufacturing dies, Jigs, fixtures and die-casting components primarily for the automobile industry, etc. For Q1FY25, the net profit was ₹8.26 crore, which is a 1620.83% increase from the same quarter in 2024

Key Metrics:

• ROE: 0.87%
• ROCE: 0.88%

Conclusion

Investing in automobile stocks can be an interesting opportunity, as the sector has an optimistic outlook. However, it comes with its own set of risks and rewards. 

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.