11 auto and auto ancillary stocks that may jump due to EV boom

According to a HDFC Securities report on automobile industry titled - Will EVs impact the ‘EV'- 2W EVs will exceed 1m units p.a. by 2025 and 8-10% penetration by 2026. Over the past six months, the effective subsidies on 2W EVs have increased to 40% of the effective price, bringing them at par with ICE vehicles due to additional incentives from state and central governments, adds the report.

Two-wheeler EVs – to reach ~10% of the market by 2026

Further, mentioning its stocks outlook in the report, HDFC Securities says, "We believe that as EVs become mainstream, the terminal growth assumptions for 2W OEMs are at risk as the threat from EVs is more near term (over the next 3-5 years). Thus, the second stage DCF assumptions will potentially be impacted for the incumbents."

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Moreover, HDFC Securities in its report has recommended to BUY/ADD these 11 stocks of autos and auto ancillary companies: -

AUTO STOCKS

1-Bajaj Auto BUY

2-Escorts ADD

3-Hero Motocorp  ADD

4-Mahindra ADD

5-Maruti Suzuki BUY

6-Tata Motors BUY

AUTO ANCILLARY STOCKS

7-Amara Raja ADD

8-Bharat Forge  BUY

9-Endurance ADD

10-Subros BUY

11-Sundram Fasteners ADD

(Source: BSE, HSIE Research)

Rating Criteria as per HDFC Securities report

BUY: >+15% return potential

ADD: +5% to +15% return potential

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)