Best Auto Stocks to Buy in India 2023 | 5paisa (2024)

With the emergence of autonomous and electric vehicles and an increasing emphasis on sustainability, the auto industry has recently undergone considerable changes. These patterns are anticipated to persist as 2023 approaches, presenting new chances for automotive investors. This article will examine the top auto stocks in India to purchase in as best auto stocks 2023, assisting investors in making defensible choices.

What are Auto Stocks?

Auto stocks are the stock of businesses that produce, manufacture, and sell automobiles and the parts that go with them. These businesses include automakers, suppliers of parts, and dealers. The instability of the company and general economic conditions might present opportunities for growth and profitability, but investing in top automobile stocks in India also entails risks.

Overview of the Auto Industry

The production, marketing, and upkeep of automobiles and related goods are all included in the global auto industry. It is a complicated and quickly changing sector affected by a wide range of technological developments, governmental rules, and customer demand. With many automakers investing in electric and hybrid vehicles, sustainability has received more attention in recent years. Also, the auto stocks India is anticipated to change in the upcoming years due to the development of driverless automobiles and linked car technology. Major participants in the auto industry, such as General Motors, Toyota, and Volkswagen, are major contributors to the expansion of the world economy.

Why Invest in Auto Stocks?

Purchasing auto sector stocks offers chances for growth and financial success. With numerous businesses developing, constructing, and selling automobiles and related goods, the auto industry is an important sector of the worldwide economy. Since the industry continues to expand and adapt, it presents possibilities for investors to capitalize on emerging trends and technology. One justification for investing in auto companies is the potential for excellent financial success. As the demand for autos and related products increases globally, several companies in the sector have seen sustained sales growth and profitability.

Also, investing in auto companies might benefit investors whose portfolios are highly concentrated in other industries by increasing their level of diversification. Auto stocks offer opportunities for exposure to developing economies and cutting-edge innovations like autonomous and electrified automobiles.

Investment in the best automobile stocks in India, however, also entails risks related to the industry's volatility and general economic situations. Before investing in the sector, investors should carefully assess their investment objectives and risk tolerance.

Top 10 Auto Stocks to Invest in India

Here is a list of the best auto stocks in India:

Factors to Consider Before Investing in Auto-related Stocks in India

India's thriving auto industry offers investors many opportunities to diversify their portfolios and exploit the market's growth potential. To make sure you are making wise and well-considered investment selections, it is crucial to consider several vital criteria before investing. Before choosing the best auto stocks to buy in India, keep the following five points in mind:

● Industry Trends and Growth Potential: Investors should investigate and evaluate the most recent trends in the Indian auto sector, including the demand for electric and hybrid automobiles and the regulatory environment. By understanding these tendencies, investors may choose the most promising auto sector stocks that are expected to expand and perform well in the future.

● Business Fundamentals: You must also consider the fundamentals of the businesses you are considering investing in. Investors should examine a company's financial performance, including its earnings, revenue, and profitability, as well as its cash flow and debt burden. Investors should also consider the management team and the company's industry competitive positioning.

● Valuation: Another crucial aspect to consider while selecting best auto stocks to buy in India 2023 is the company's value. Companies that seem overvalued should raise red flags for investors since it may be challenging to realize a reasonable return on investment.

The performance of stocks tied to the car industry can be significantly impacted by the r● Regulatory Environment: egulatory environment in India. Investors should keep a close eye on any changes to regulations, including those affecting safety standards and emissions standards, as well as their potential effects on the auto industry. Investors can choose stocks wisely by thoroughly understanding the regulatory environment.

● World Economic Conditions: Investors should also consider how the global economy would affect the Indian auto industry. Various variables, including interest rates, inflation, and geopolitical events, can significantly impact the performance of stocks associated with the auto industry. To make wise investment selections, staying current on the most recent economic news and trends is critical.

Investors can position themselves for long-term success in the best auto stock by considering these important variables and identifying excellent firms with great growth potential.

Performance Overview of 2023’s Auto Stocks List

1. Maruti Suzuki India Ltd

Suzuki Motor Corporation of Japan's subsidiary, Maruti Suzuki India Ltd, is the top automobile stocks in India of passenger vehicles. The company's headquarters are in New Delhi, India, where it was established in 1981.

Key Financial Ratios

● Market Cap: INR 2.8 trillion
● Face Value: INR 5 per share
● EPS (Earnings per share): INR 201.68
● Book Value: INR 1,692.82
● RoCE (Return on Capital Employed): 21.07%
● ROE (Return on Equity): 22.10%
● Debt to Equity Ratio: 0.09
● Stock PE (Price-to-earnings Ratio): 47.08
● Dividend Yield: 0.58%
● Promoter's Holdings: 56.21%

2. Bajaj Auto Ltd

A significant player in the Indian two- and three-wheeler markets is Bajaj Auto Ltd. The company was established in 1945 and had its headquarters in Pune, Maharashtra, India. Bajaj Auto offers a wide range of products, from budget-friendly motorcycles to high-end models. It also makes commercial vehicles like autorickshaws.

Key Financial Ratios

● Market Capitalization: Over INR 1.3 trillion
● Face Value: INR 10 per share
● EPS (Earnings per share): INR 154.41
● Book Value: INR 861.39
● RoCE (Return on Capital Employed): 23.32%
● ROE (Return on Equity): 21.42%
● Debt to Equity Ratio: 0.05
● Stock PE (Price-to-earnings Ratio): 23.36
● Dividend Yield: 3.45%
● Promoter's Holdings: 53.13%

3. Hero MotoCorp Ltd

The largest two-wheeler producer in the world, Hero MotoCorp Ltd., is an Indian company with headquarters in New Delhi. The company was created in 1984 and had a wide range of products catering to diverse market areas.

Key Financial Ratios

● Market Capitalization: Over INR 580 billion
● Face Value: INR 2 per share
● EPS (Earnings per share): INR 117.79
● Book Value: INR 874.44
● RoCE (Return on Capital Employed): 30.60%
● ROE (Return on Equity): 27.26%
● Debt to Equity Ratio: 0.00
● Stock PE (Price-to-earnings Ratio): 17.96
● Dividend Yield: 3.11%
● Promoter's Holdings: 34.63%

4. Tata Motors Ltd

With its headquarters in Mumbai, Maharashtra, Tata Motors Ltd. is a global Indian automaker. The business was established in 1945 and is a component of the Tata Group. The company operates in multiple nations, giving it a substantial global footprint.

Key Financial Ratios

● Market Capitalization: Over INR 1.2 trillion
● Face Value: INR 2 per share
● EPS (Earnings per share): INR -31.46
● Book Value: INR 148.19
● RoCE (Return on Capital Employed): -3.25%
● ROE (Return on Equity): -53.54%
● Debt to Equity Ratio: 1.44
● Stock PE (Price-to-earnings Ratio): -26.33
● Dividend Yield: N/A
● Promoter's Holdings: 42.39%

5.

Mumbai, India, is home to the international vehicle manufacturing company Mahindra & Mahindra Ltd. The company was started in 1945 and has since evolved into one of India's major vehicle manufacturers.

Key Financial Ratios

● Market Capitalization: Over INR 1 trillion
● Face Value: INR 5 per share
● EPS (Earnings per share): INR 66.73
● Book Value: INR 377.29
● RoCE (Return on Capital Employed): 18.84%
● ROE (Return on Equity): 17.78%
● Debt to Equity Ratio: 0.45
● Stock PE (Price-to-earnings Ratio): 17.16
● Dividend Yield: 0.72%
● Promoter's Holdings: 18.93%

6. Ashok Leyland Ltd

A global Indian firm called Ashok Leyland Ltd is situated in Chennai and produces automobiles. The business, established in 1948, focuses on making commercial vehicles, such as trucks, buses, and other heavy-duty vehicles.

Key Financial Ratios

● Market Capitalization: Over INR 409 billion
● Face Value: INR 1 per share
● EPS (Earnings per share): INR 2.13
● Book Value: INR 46.05
● RoCE (Return on Capital Employed): 10.67%
● ROE (Return on Equity): 1.29%
● Debt to Equity Ratio: 0.41
● Stock PE (Price-to-earnings Ratio): 41.51
● Dividend Yield: 0.82%
● Promoter's Holdings: 51.12%

7. TVS Motor Company Ltd

A global Indian motorcycle manufacturer with its headquarters in Chennai, TVS Motor Company Ltd. Since its establishment in 1978, the business has expanded to rank among India's top two-wheeler producers.

Key Financial Ratios

● Market Capitalization: Over INR 375 billion
● Face Value: INR 1 per share
● EPS (Earnings per share): INR 13.03
● Book Value: INR 80.31
● RoCE (Return on Capital Employed): 23.36%
● ROE (Return on Equity): 16.24%
● Debt to Equity Ratio: 0.09
● Stock PE (Price-to-earnings Ratio): 30.14
● Dividend Yield: 0.42%
● Promoter's Holdings: 57.39%

8. Eicher Motors Ltd

Commercial vehicles, motorbikes, and automotive gear are all made by the multinational Indian automaker Eicher Motors Ltd. Chennai, India, home to the business established there in 1948. The famous motorcycles produced by Eicher Motors under the Royal Enfield brand are well-liked in India and several other nations.

Key Financial Ratios

● Market Capitalization: Over INR 843 billion
● Face Value: INR 1 per share
● EPS (Earnings per share): INR 143.85
● Book Value: INR 924.68
● RoCE (Return on Capital Employed): 21.32%
● ROE (Return on Equity): 20.69%
● Debt to Equity Ratio: 0.03
● Stock PE (Price-to-earnings Ratio): 46.14
● Dividend Yield: 0.77%
● Promoter's Holdings: 49.05%

9. MRF Ltd

MRF Ltd. is a well-known Indian multinational corporation specializing in producing and selling tyres. Chennai, India, serves as the company's headquarters; it was founded there in 1946. Among the many goods offered by MRF Ltd are automobiles, motorbikes, lorries, buses, and other industrial uses.

Key Financial Ratios

● Market Capitalization: Over INR 562 billion
● Face Value: INR 10 per share
● EPS (Earnings per share): INR 570.13
● Book Value: INR 16,983.77
● RoCE (Return on Capital Employed): 12.16%
● ROE (Return on Equity): 14.11%
● Debt to Equity Ratio: 0.00
● Stock PE (Price-to-earnings Ratio): 52.84
● Dividend Yield: 0.49%
● Promoter's Holdings: 27.80%

10. Bosch Ltd

An important international engineering and technology corporation with its headquarters in India is Bosch Ltd. It is a division of Robert Bosch GmbH, a German corporation. The company's four main business sectors are mobility solutions, industrial technology, consumer goods, and energy and building technology.

Key Financial Factors

● Market Capitalization: Over INR 75 billion
● Face Value: INR 10 per share
● EPS (Earnings per share): INR 187.76
● Book Value: INR 921.79
● RoCE (Return on Capital Employed): 13.26%
● ROE (Return on Equity): 13.58%
● Debt to Equity Ratio: 0.00
● Stock PE (Price-to-earnings Ratio): 52.38
● Dividend Yield: 0.83%
● Promoter's Holdings: 70.54%

Conclusion

In conclusion, investing in the best auto stocks in 2023 may offer investors a lucrative chance. Investors can make educated selections and earn sizable returns by researching important financial statistics and market trends. Before making any investment selections, caution and careful investigations are essential. Investors can make educated selections and potentially profit from investing in the best auto stocks of 2023 by considering the factors that are mentioned above.

FAQs on Auto Stocks

Which Indian companies are investing in the auto sector?

Indian companies such as Mahindra & Mahindra, Tata Motors, Maruti Suzuki, and Bajaj Auto are investing in the auto sector stocks in India.

What is the future of the auto sector in India?

The future of the auto sector stocks in India looks promising, with a growing demand for electric vehicles and a push for sustainable mobility solutions.

Who is the largest manufacturer in the auto sector in India?

Maruti Suzuki is the largest manufacturer in the auto sector and is the best automobile stocks to buy in India 2023, with a market share of over 50% in the passenger vehicle segment.

How many stocks are in the auto sector?

Numerous stocks in the auto sector, ranging from manufacturers to component suppliers, dealerships, and service providers, make it a diverse and dynamic industry for investors.

How can I invest in Auto stocks using the 5paisa App?

To invest in auto stocks using the 5paisa app, open an account and complete the KYC process. Next, select the auto stock you wish to invest in and place your order. Using the app's tools and features, one can invest easily in auto stocks.