Top 4 Auto Stocks to Buy as India’s EV Shift Gains Pace

Synopsis: Four auto stocks are flashing green as Nomura backs India’s EV shift with targets pointing to gains of up to 52%.

India’s electric vehicle story is no longer a distant chapter – it is being written right now. As EV adoption moves from policy ambition to showroom reality, global brokerage Nomura has zeroed in on four listed players it believes are best positioned to ride this structural shift. With upside potential ranging from 52 percent to 24 percent, the picks span original equipment manufacturers and ancillary suppliers alike.

Mahindra & Mahindra

Nomura has retained a Buy rating with a target price of Rs. 4,662 implying a 51% upside, building its case around strong demand visibility across utility vehicles and a rising contribution from electric offerings. The valuation uses a sum-of-parts approach, assigning value to the core automotive business as well as listed and unlisted investments. Dealer feedback cited in the report points to robust demand for models such as Scorpio N and Bolero, with supply constraints still visible in certain variants – a sign of a healthy order pipeline rather than a demand problem.

The brokerage also highlights that M&M is well-placed to meet upcoming Corporate Average Fuel Efficiency norms, given its relatively higher EV mix targets. It estimates OEMs will need to raise their EV mix by one to two per cent annually over the next few years to stay compliant. With early and sustained investments in electrification through its Born Electric platform, Mahindra is seen as one of the clearest structural beneficiaries of this regulatory shift among domestic automakers.

Hyundai Motor India

Nomura maintains a Buy on Hyundai with a target of Rs. 2,698 implying a 46 percent upside, valuing the company at 25 times its estimated FY28 earnings. The brokerage expects Hyundai to benefit from a strong product pipeline across both ICE and electric segments, with premium EV models seen as a potential margin lever over time. Government policy direction is also flagged as a tailwind, with recently announced drafts expected to support EV penetration in the coming years.

The demand data backs the thesis. EV penetration in the passenger vehicle segment has already climbed to around 4% in FY26 from 2.4% in FY25, with larger cars crossing 9% in Q4FY26 – a trend that directly favours Hyundai’s premium-heavy portfolio. The company’s ability to balance volume growth with profitability remains central to Nomura’s positive stance, and with seven new EV models planned for India by 2030, the product pipeline provides a long runway for sustained earnings growth.

UNO Minda

Among ancillary players, UNO Minda is rated Buy with a target of Rs. 1,593 implying a 40 percent upside, valued at 45 times FY28 earnings. The core thesis is straightforward – EVs carry far more advanced electronic content than combustion vehicles, directly expanding the kit value that component suppliers earn per vehicle. The company has been steadily building its presence in sensors, controllers, and other high-value components, areas that are gaining strategic importance as vehicles become more technology-driven.

With three-wheeler EV penetration already above 33% in FY26 and potentially approaching 60% by FY30, the pace of electrification across vehicle categories is set to drive sustained volume and value growth for suppliers like UNO Minda. Nomura sees this transition as a multi-year earnings re-rating opportunity for well-positioned ancillary names.

Ather Energy

Nomura maintains its Buy on Ather with a revised target price of Rs. 1,111 implying a 16 percent upside, raising its volume estimates for FY27 and FY28 to 3,99,000 and 5,09,000 units respectively. Electric scooter penetration has already touched 16.4% in FY26, and the brokerage sees overall two-wheeler EV penetration reaching around 17% by FY30. Expanding distribution and new launches are expected to keep demand momentum strong through the forecast period.

On the financials, Ather is expected to turn EBITDA positive by FY28 as operating leverage kicks in with scale. The company’s focus on the premium end of the two-wheeler market provides both pricing power and brand differentiation in an increasingly crowded segment. While subsidy changes and competitive intensity remain risks worth watching, Nomura’s long-term conviction on the stock stays intact.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Top 4 Auto Stocks to Buy as India’s EV Shift Gains Pace appeared first on Trade Brains.