Nomura Highlights EV Growth, Names Auto Picks Ahead of Results

Nomura looked at car and two-wheeler companies ahead of their results.

It said more people are choosing electric vehicles, and expects that trend to continue.

Nomura thinks companies with strong electric-vehicle products and technology may do better as the market changes.

It named Mahindra & Mahindra and Ather Energy as its preferred picks in their vehicle categories.

It also kept Buy ratings on Hyundai Motor India and TVS Motor Company.

The brokerage expects higher material costs to squeeze some companies’ profits in the near term.

It says the effect may be greater for commercial vehicles and tractors, while two-wheeler makers are expected to pass on much of the cost pressure.

Passenger-vehicle makers may also face margin pressure because competition is intense.

Nomura expects margins to improve as vehicle price increases catch up with commodity costs.