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2025-09-12 16:34:17
Citigroup is bullish on three key drivers of Indian auto demand, with Maruti Suzuki being its top pick. (1) Citigroup ranked passenger cars as its top pick in the automotive sector, citing a "triple tailwind" of income tax cuts, lower Goods and Services Tax (GST), and lower interest rates. (2) The investment bank expects policy changes to drive a "long-awaited recovery in passenger car demand," raising its forecast for auto sales growth in fiscal 2026 from 1.3% to 2.1% and increasing its forecast for fiscal years 2027-2028. (3) Maruti Suzuki (MRTI.NS) is its top pick in the sector, followed by Mahindra & Mahindra (MAHM.NS) and Hyundai India (HYUN.NS), all with "buy" ratings. (4) Target prices have been raised: Maruti Suzuki from 14,400 to 17,500 rupees; Mahindra from 3,700 to 4,170 rupees; and Hyundai India from 2,400 to 2,900 rupees. 5. Analysts suggest that Maruti Suzuki will benefit from a recovery in demand for small cars, where the tax impact is most pronounced, while Mahindra and Hyundai India will benefit from lower SUV tax rates. 6. Year-to-date, Maruti Suzuki and Hyundai India have both risen 41%, while Mahindra is up 19%. The auto sector index has risen 18%, while the benchmark Nifty 50 index has gained 6%.
