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The auto industry (barring tractors) saw steady growth, with select OEMs outperforming across segments – TVSL led 2Ws, while HMCL/RE posted healthy volumes; however, BJAUT saw muted growth (its retail share also declined, to ~9.3% in Sep-26 vs ~10.7%/10.6% in Sep-25/FY26). Growth for CVs and PVs remained broad-based. Retail momentum also sustained across segments (refer to our recent channel check: Expert call – Large dealers see DD growth in upcoming festive). While absolute volumes were healthy, growth appears softer mainly due to festive mismatch with prior year (Diwali in Nov-26 vs in Oct-25 LY) and an elevated Sep-25 base following GST-cut-led purchase deferments in Aug-25.

KTAs:

1) In 2Ws, TVSL led the pack, with 23% yoy dispatch growth; the 2W industry’s retail momentum remained strong at 33% yoy (22/29/21% in 2HFY26/Jul/Aug-26).

2) PVs saw strong growth across OEMs, led by MSIL (30% yoy domestic growth), healthy momentum at TMPV/M&M (up 15%/14% yoy), with HMIL posting record volumes (up 11% yoy).

3) MHCV dispatches were robust, with TMCV/AL logging 42%/28% yoy growth; MHCV industry retail momentum also sustained, with volumes up 50% yoy (30%/29% in Jul/Aug-26).

4) In tractors, volumes declined yoy across players (Escorts/M&M down ~17%/21% yoy) and EKL’s management indicated potential industry growth moderation over coming quarters amid a high base effect.

5) Retail E-2W penetration was 11.6% (Aug-26/FY26: 10.7%/6.6%), with TVSL the frontrunner, followed by BJAUT and Ather; E-3W penetration reached a fresh high of ~52%, with BJAUT leading, followed by M&M/TVS; E-PV penetration rose to 8.4% (Jul/Aug-26: 8%/7.7%), with TMPV ahead of peers, followed by M&M/JSW MG.

2Ws: TVSL leads the pack; strong retail momentum continues

TVSL logged ~646k total 2W units (up 23% yoy), led by 17%/48% growth in domestic/export sales. HMCL’s volume was ~766k units (up 11.5% yoy) amid 14% yoy growth in domestic and 31% fall in export volume. EIM RE logged ~134k units (up 7.7% yoy), led by 7%/17% rise in domestic/export volume. BJAUT logged ~451k total 2W units (+5% yoy), with 34% export growth amid 12% dip in domestic volume; BJAUT’s retail market share has dipped by ~144bps to ~9.3% in Sep-26 (vs ~10.7%/10.6% in Sep-25/FY26). 2W industry’s strong retail momentum continued, with volume up 33% yoy (2HFY26/Jul/Aug-26: 22%/29%/21%). E-2W penetration was 11.6% (Aug-26/FY26: 10.7%/6.6%); E-2W industry volume surged 89% yoy in Sep-26 (2HFY26/Jul/Aug-26: 23/89/68%), with TVSL at #1, followed by BJAUT/Ather.

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

MSIL led the pack, with total PV dispatches up 24.4% yoy to ~236k units, led by ~62%/24% surge in domestic UV/car volumes; exports grew 4.8% yoy. TMPV delivered ~15% yoy growth, with total PV at ~70.2k units (total EV volumes up ~67% yoy in Sep-26). HMIL’s overall volumes were up ~11% yoy, reaching ~78k units, the highest ever total monthly sales. M&M’s domestic PV dispatches grew 14% yoy to ~64k units. PV industry retail growth was robust at 31% yoy (2HFY26/Aug-26: 20/20%); E-PV penetration stood at ~8.4% (4.5% in FY26)

CVs: TMCV/AL post robust growth; the strong MHCV retail demand sustains

TMCV’s total volumes grew 42% yoy to 51k units, led by 44%/19% yoy growth in domestic MHCVs/LCVs and 179% yoy growth in exports. AL posted ~28% yoy growth in total volumes to ~24k units, led by 40%/10% yoy growth in domestic MHCVs/LCVs and 18% yoy growth in exports. MHCV’s retail momentum sustained, with 50% yoy growth (30%/29% in Jul/Aug-26)..

Tractors: Volumes decline yoy in Sep-26; base catch-up the key monitorable

Escorts/M&M saw 17%/21% yoy dip in total dispatches to 15.2k/52.1k units. Per Escorts’s Management, while festive demand, crop harvesting, and improving rural liquidity are expected to support industry volumes, high base effect may continue moderating industry growth in 2H.

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

Amid strong momentum in underlying demand, we favor 2W (Yet another mega shift in motion; Ather the frontrunner) and CV (India CVs: Reacceleration in motion) OEMs over PVs, given a 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 a multi-year favorable product cycle; reiterate BUY). In 2Ws, we favor TVSL (Strong FY26; premiumization and EVs to drive long-term growth) and Ather (Konarc: a decisive move to catalyze EV adoption and leadership). In Ancillaries, we like CAL (Robust 1Q; firing on all cylinders; reiterate BUY), JK Tyre (Weak 1Q; demand, margins to progressively improve), Sandhar (Guides for revenue to double in 3 years; valuations attractive) and Pricol (Strong 1Q; demerger paves way for inducting strategic partner).

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