Stocks to Buy: Eicher Motors, Tata Motors, M&M, Ashok Leyland are the 4 Ambits picks in the Automobile sector

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Eicher Motors, Tata Motors, Mahindra & Mahindra, Ashok Leyland are Ambits picks in Automobiles sector. Ambit has initiated coverage on the nine OEMs (Original Equipment Manufacturers) which also include Bajaj Auto, Escorts Kubota, Hero MotoCorp, Maruti Suzuki India, in addition to Eicher Motors, Tata Motors, Mahindra & Mahindra, Ashok Leyland.

Ambit Research in the OEM's prefers tractors over two wheelers and light Commercial Vehicles. These nevertheless as per Ambit Research are better placed compared to Medium and Heavy Commercial Vehicles and passenger vehicles too.

Also Read- Stocks to Buy: ICICI Bank, SBI, L&T, Bharti, ONGC among top 26 bottom up picks by Jefferies for JuneTractors, two wheelers and light Commercial Vehicles as per Ambit Research are better placed as the demand in the segments is turning favorable,. Further the competitive intensity is favorable and Ambit feels that these segments have better earnings growth prospects.

In addition lower Capex intensity is leading to better Free cash flow conversion.Passenger Vehicles as per Ambit will continue to see K shaped recovery, with demand for SUV's remaining strong, But the SUVs segment will also have highest competitive and capex intensity.Medium and Heavy Commercial Vehicles (MHCV) segment is at the crossroads with estimates of muted volume growth (a possible volume decline in FY27 is also estimated by Ambit. Pricing discipline ,till it lasts would drive earnings growth for the MHCVsAmbit Research prefers OEMs with better segmental outlook, company-specific revenue & margin triggers, lower risk of disruptions, and reasonable valuations.Also read- Navigating market peak: Anil Ghelani of DSP Mutual Fund shares fixed-income investment strategy amid