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The auto industry (barring tractors) sustained healthy growth in Oct-26, with TVSL (up 29%), EIM RE (up 7%), and MSIL (up 25%) emerging as key positive surprises, TMCV (up 27%) maintained sustained growth, while tractor players (Escorts/M&M down ~10%/12%) disappointed amid demand moderation. While retail momentum moderated in Oct-26, underlying demand remained strong on a festive-to-festive basis (2W/CV/PV industry delivering ~26%/54%/29% yoy growth). The decline in Oct-26 retail growth is largely attributable to festive timing mismatch (Diwali in Nov26 vs in Oct-25) and a high base following GST-led pent-up demand (announcement on 15-Aug-25 and implementation on 22-Sep-25; also refer to our recent channel check: Expert call – Large dealers see DD growth in upcoming festive). KTAs: 1) In 2Ws, TVSL led the pack, with ~29% yoy dispatch growth (~700k units; ~1% above estimates; FY27E residual rate at ~609k units/month); RE dispatched healthy at ~133k units (~7% up yoy; ~1% below our estimates; FY27E residual rate at ~123k units/month); HMCL delivered ~734k units (up 15.5%). 2) PVs saw strong growth across OEMs, led by MSIL (up 25% yoy; 14% above estimates; FY27E residual rate at ~235k units/month), healthy momentum at TMPV (up 23% yoy; ~5% above estimates) and HMIL (up ~18%; ~7% above estimates); M&M delivered subdued volume, with ~2% yoy growth (~5% above estimate). 3) In MHCVs, TMCV logged 27% yoy growth (~48k units; ~8% below our estimate; FY27E remainder rate at ~47k units/month). 4) In tractors, volume declined across players on yoy basis (Escorts/M&M down ~10%/12% yoy; 11%/10% below our estimate) and EKL’s management indicated potential industry moderation in the near term amid elevated input costs and consequent price hikes.

2Ws: TVSL leads the pack

TVSL logged ~700k total 2W units (up 29% yoy), led by 22%/51% growth in domestic/export sales. HMCL’s volume was ~734k units (up 15.5%; 5% below estimates) amid 17% growth in domestic volume albeit 5% fall in export volume. EIM RE logged ~133k units (up 7% yoy), led by 4%/47% rise in domestic/export volume. 2W industry retail growth, though, moderated in Oct-26; strong momentum continued on festive-to-festive basis, with ~26% yoy growth. E-2W penetration was 9.7% (Sep-26/FY26: 11.6%/6.6%); E-2W industry volume grew 48% yoy in Oct-26 (2HFY26/Aug/Sep-26: 23/68/90%), with TVSL at #1, followed by BJAUT/Ather. BJAUT has yet to post its dispatches.

PVs: Strong growth across players, with MSIL the frontrunner among peers

MSIL led the pack, with total PV dispatches up 25% yoy to ~276k units, led by ~26%/18% surge in domestic UV/car volume; exports grew 59% yoy. TMPV delivered ~23% yoy growth, with total PVs at ~75.4k units (total EV volume up ~75% yoy). HMIL’s overall volume was up ~18% yoy, reaching ~82.3k units, the highest ever total monthly sales. M&M’s domestic PV dispatches grew 2.4% yoy to ~73.3k units. PV industry retail growth though moderated in Oct26/strong momentum continued on festive-to-festive basis, with ~29% yoy growth. E-PV penetration stood at 7.2% (Sep-26: 8.7%), with TMPV ahead of peers, M&M/JSW MG at #2/#3.

CVs: TMCV posted robust growth; the strong MHCV retail demand sustains

TMCV’s total volume grew 27% yoy to 47.7k units, led by 16%/11% yoy growth in domestic MHCVs/LCVs and 225% yoy surge in exports. MHCV’s retail momentum sustained, with 28% yoy growth (53%/29% in Sep/Aug-26). AL has yet to post its dispatches.

Tractors: Volume declined yoy in Oct-26; monsoon-related disruptions monitorable

Escorts/M&M saw 10%/12% yoy dip in total dispatches to 16.9k/64.8k units. Per Escorts’s Management, the industry witnessed some moderation in Oct-26, impacted by shift in festive timing and monsoon-related disruptions; elevated input costs from geopolitical developments and consequent price hikes may moderate demand in the near term.

Our view: Favor 2Ws and CVs over PVs; CAL, Pricol, Sandhar, and JKI in ancillaries

Amid strong momentum in underlying demand, we continue to favor 2W/CV OEMs over PVs, given the similar demand trajectory but better pricing flexibility amid commodity pressures and a limited new-PV-model launch pipeline in FY27; within PVs, HMIL seems better placed, given its strong product pipeline over the next 18-24M (Entering an offensive product cycle). In 2Ws, we favor TVSL (Growth momentum sustains; margins resilient) and Ather (Turns EBITDApositive; capacity expansion to accelerate growth). In Ancillaries, we like CAL (Strong growth with multiple drivers), Pricol (Strong 1Q; demerger paves way for inducting strategic partner), Sandhar (Guides for revenue to double in 3 years; valuations attractive) and JK Tyre (Strong growth, but RM dents margins).

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