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Retail demand trends in Aug’26 across all segments appear encouragingly strong, with all segments expected to record double-digit growth in Aug. Strong retails, lean channel inventory, capacity expansion by OEMs, and the recent launches should support healthy wholesale volume growth for Aug across segments. In PVs, we expect the four listed PV OEMs to deliver an aggregate 38% wholesale growth in Aug’26. Within PVs, we expect all OEMs to post strong double-digit growth, led by channel filling ahead of the festive season. We expect MSIL and TMPV to outperform the industry, while HMIL is expected to underperform the industry. M&M is expected to revert to 60k+ volumes for PV on the back of supply chain normalization. In 2Ws, we expect the four listed OEMs to report an 18% volume growth in Aug’26, largely led by strong exports and healthy demand in the premium segment. Further, CV retails appear to have picked up well in Aug’26, and hence, we expect the top three CV OEMs to post ~25% aggregate volume growth for the month. In addition, tractors continue to witness healthy demand in the month, although the retail pace is tapering down as the base catches up. Accordingly, we expect the top two tractor OEMs to post about 17% YoY growth in wholesales for Aug. Our top OEM picks are MSIL, TVSL, BJAUT, and MM. Among auto ancillaries, our top picks are Unominda, MSWIL, SAMIL, and Endurance.

* PVs: Demand continues to remain healthy for Aug, with retail sales likely to grow ~12% YoY during the month. Given the lean channel inventory for most OEMs, wholesale growth is expected to outpace retail volumes ahead of the festive season. We expect MSIL and TMPV to outperform industry growth in Aug with strong double-digit growth, given a healthy order backlog. For TMPV, the recently launched Sierra, Sierra EV, and Punch EV are expected to continue to boost wholesales. MSIL’s wholesale volume growth is expected to be supported by a healthy order backlog, low channel inventory, the ramp-up of incremental capacity at Kharkhoda and Gujarat, and also the recently launched Brezza upgrade. We also expect MM to post strong volume growth led by normalization of supply issues. For HMIL, wholesale is likely to be muted relative to peers on account of weak retail and lower exports, driven by higher Middle East exposure. Overall, for Aug, we expect the four listed PV players to post aggregate growth of 38% YoY in dispatches, largely driven by MSIL, M&M, and TMPV

* 2Ws: Aug retails are expected to remain healthy at ~18% growth. For Aug, we expect a 17% volume growth in dispatches for the four listed companies, aided by inventory normalization and steady retail. Growth is expected to be driven by TVSL and BJAUT. For BJAUT, healthy double-digit volume growth would be largely driven by sustained momentum in exports. We expect HMCL to underperform the industry with single-digit volume growth, as demand for up to 125cc motorcycles continues to underperform the premium industry demand. RE is likely to post high single-digit growth, constrained only by capacity.

* CVs: After the de-escalation of the West Asia crisis, the CV retail appears to have recovered and is expected to record a 13% volume growth in Aug. According to current trends in Vahan, TMCV continues to outperform peers, with healthy double-digit growth. Overall, we expect the top three players in this segment to post ~25% YoY growth in dispatches in Aug, largely over a low base of last year.

* Tractors: This segment continues to witness healthy demand trends even in the current fiscal, led by positive terms of trade for farmers and healthy reservoir levels. Demand momentum is likely to remain healthy in the tractor segment, at least in 1H. Overall, we expect the two listed players in this segment to post a healthy 17% YoY dispatch volume growth in Aug’26.

* Valuation and view: Due to the low base of 2Q and the build-up to the festive season, volumes in 2QFY27 are also likely to remain strong, while growth rates are bound to taper off in 2H on a high base. Given the sustained demand momentum and likely minimal impact of commodity inflation in 2Q, we expect renewed investor interest in the sector over the coming quarters. Our top OEM picks are MSIL, BJAUT, TVSL, and MM. Among auto ancillaries, our top picks are Unominda, MSWIL, SAMIL, and Endurance.

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