Maruti vs M&M vs Tata Motors: Which Auto Stock Is a Better Buy for Long-Term Growth?

Synopsis: Leading brokerage houses have revised their outlook on India’s passenger vehicle sector as improving industry trends reshape investor sentiment. While some automakers have received stronger recommendations, others continue to face cautious views. Here’s a comparison of the latest brokerage calls and which stock appears best placed for long-term investors.

Brokerage houses have turned increasingly optimistic on India’s passenger vehicle sector as easing commodity prices, improving demand prospects, and the accelerating shift towards electric vehicles reshape industry expectations. While some automakers have received upgraded ratings and higher target prices, others continue to face cautious outlooks. Here’s a look at the latest brokerage calls and which stock appears to offer the best risk-reward. Brokerage View on Maruti Suzuki 

Jefferies has raised the rating on Maruti Suzuki to ‘Buy’ with a target price of Rs 16,500, against the current market price of Rs 14,352, which is an upside of 15%.The brokerage added that the correction in crude oil prices owing to improved geopolitical tensions in the Middle East eased concerns around fuel costs and supported passenger vehicle demand. At the same time, softer steel and other metal prices should help improve margins for automakers.

Reflecting these favourable industry trends, Jefferies has increased its FY27 to FY29 earnings estimates by 2-4% and now expects Maruti to deliver an earnings per share (EPS) CAGR of nearly 16% between FY26 and FY29. The brokerage also highlighted that the stock has underperformed the Nifty 50 by around 16% so far this calendar year, making its valuation of approximately 24 times FY27 estimated earnings appear attractive. Overall, Jefferies believes Maruti is well-positioned to benefit from improving demand conditions and lower input costs.

Brokerage View on  Mahindra & Mahindra

Meanwhile, HSBC maintained its ‘Buy’ rating on Mahindra & Mahindra with a target price of ₹4,200, which is an upside of33 %. The brokerage said it continues to view the company’s outlook positively, aided by strong demand in the SUV space and a slow but steady rise of electric vehicles. EV penetration in India’s passenger vehicle market has gained traction in recent weeks, partly on the back of worries over fuel prices, HSBC said, but expects EV penetration to be in the mid-teen percentages in the medium term, between FY30 and FY32. 

The brokerage also expects Mahindra’s operating margins to remain healthy in FY27 and FY28 aided by Production Linked Incentive (PLI) benefits before tapering a bit in FY29. Overall, HSBC remains positive on Mahindra’s ability to deliver profitable growth over the long term, strengthen its leadership position in premium SUVs and grow its EV portfolio.

Brokerage View on Tata Motors PV

Opinions of brokers on Tata Motors Passenger Vehicles are far more split. ICICI Securities maintained a ‘Hold’ rating on the stock with a target price of ₹370, factoring in the company’s ambitious five-year roadmap announced at its Investor Day. Management has laid out plans to achieve a 15% volume CAGR between FY26 and FY31, underpinned by six new vehicle launches, over 20 product refreshes, higher penetration of EVs and CNG vehicles, and continuous cost reduction efforts across both ICE and EV businesses. 

The company also plans to expand production capacity to support future growth while improving brand positioning. However, ICICI Securities believes that despite these positive initiatives, recovery in Jaguar Land Rover (JLR) is likely to remain gradual, while near-term margin improvement in the domestic business could take time, leading the brokerage to adopt a more cautious stance.

On the other hand, Motilal Oswal has been more conservative and has assigned a ‘Sell’ rating with a target price of ₹312, with a downside of 11 percent for Tata Motors Passenger Vehicles. While the brokerage said it acknowledges management’s long-term strategy to launch multiple new models, expand dealership networks, increase annual production capacity and drive cost efficiencies, it believes several challenges remain. 

These include rising raw material costs, persistent headwinds in the JLR business, and the possibility that margin expansion could be slower than management expects. Although domestic passenger vehicle demand remains healthy, Motilal Oswal believes execution risks and profitability concerns outweigh the potential upside at current valuations.

How Do the Three Auto Giants Compare? 

Looking at the latest brokerage recommendations collectively, Maruti Suzuki appears to have emerged as the preferred pick. Unlike Mahindra, whose strong operating performance is already reflected in its share price, Maruti offers a combination of improving macroeconomic tailwinds, lower commodity costs, rising earnings estimates, and relatively reasonable valuations after underperforming the broader market. These factors provide the company with meaningful re-rating potential if demand continues to improve over the coming years.

Mahindra & Mahindra is still a great long term structural growth story especially for investors wanting to get exposure to India’s fast growing SUV and EV segments. Its healthy margins, strong product pipeline and market leadership continue to make it one of the highest quality automobile companies in the country. But in relation to Maruti, a lot of that optimism is already priced into the stock and valuation is a little less compelling.

Tata Motors Passenger Vehicles, meanwhile, undoubtedly possesses one of the most ambitious growth strategies among Indian automakers. The company is investing heavily in new product launches, EVs, capacity expansion, and cost optimisation. However, the contrasting views of ICICI Securities and Motilal Oswal suggest that the market remains cautious about execution, near-term margin expansion, and the recovery of its overseas luxury vehicle business. Until these concerns begin to ease, the stock may continue to witness relatively muted sentiment despite its long-term potential.

Key Takeaways for Investors 

From a neutral perspective, Maruti Suzuki currently appears to offer the most balanced risk-reward opportunity among the three companies. The positive macro environment, improving earnings outlook, attractive valuation, and upgraded brokerage expectations provide a strong foundation for future performance. 

Mahindra & Mahindra continues to be a high-quality long-term compounder with solid fundamentals and leadership in SUVs, while Tata Motors Passenger Vehicles remains a promising but relatively higher-risk investment that will likely require stronger execution before investor confidence improves further.

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