Automobile companies posted muted revenue and operating profit growth in Q1 FY26, with margins under pressure. However, OEMs remain optimistic, citing long-term growth drivers such as India's expanding road network, policy support for supply chains, the vehicle scrappage policy, lower interest costs, and continued infrastructure capex.

Axis Securities is selective in its outlook. Its top conviction ideas include Hero MotoCorp and Bajaj Auto in two-wheelers, Ashok Leyland in commercial vehicles, and Mahindra & Mahindra (M&M) in passenger vehicles and tractors, supported by its strong SUV portfolio and tractor leadership. The brokerage also suggests a 'Buy on Dips' strategy for TVS Motor Company and Maruti Suzuki India.

In auto ancillaries, Axis Securities' top pick is Sansera Engineering, while recommending 'Buy on Dips' for Endurance Technologies and UNO Minda for long-term gains.

"In the long run, product premiumization, strong order books, growing exports, GST rate cut and the shift toward EVs are expected to drive higher content per vehicle, boosting profitability," Axis Securities said.

Here are Axis Securities' top auto stock pics:

Hero MotoCorp | Buy | Target Price: ₹5,220

Hero MotoCorp's global business grew 27% YoY in Q1FY26, continuing the strong momentum seen in FY25. With a focus on 10–12 strategic markets, the company is introducing localised, premium-oriented products to drive market share gains. Hero MotoCorp targets scaling its global operations to contribute ~10% of overall revenue and volumes, positioning exports as a critical growth and diversification lever over the medium term, Axis Securities said.

The brokerage firm has a 'Buy' call on Hero MotoCorp shares with a target price of ₹5,220 apiece.

Bajaj Auto | Buy | Target Price: ₹9,360

Bajaj Auto's management guides for 15%–20% QoQ export growth in FY26, supported by strong demand, market recovery, and product mix improvement. Bajaj Auto's EV portfolio is now at high single-digit EBITDA margins, a sharp reversal from red territory in FY24. The company has thus cemented the pole position at 31% in e-2W vehicles.

According to the brokerage house, the short-term supply bottlenecks are likely priced in, but structural cost leadership and product acceptance offer a high-ROI EV optionality. It has a 'Buy' rating on Bajaj Auto shares for target price of ₹9,360.

Ashok Leyland | Buy | Target Price: ₹135

Ashok Leyland's power solutions segment posted a 28.5% YoY revenue increase, diversifying income streams and enhancing margin stability. The company's capacity expansion is also targeted and demand-driven, Axis Securities noted.

It recommends buying Ashok Leyland shares for a target price of ₹135 apiece.

Sansera Engineering | Buy | Target Price: ₹1,500

Sansera Engineering's initiatives focused on optimising manpower and capacity utilisation are further contributing to performance. US tariff impacts have so far been passed through to most customers, limiting downside risk, said the brokerage firm.

Axis Securities has a 'Buy' call on Sansera Engineering shares for a target price of ₹1,500 apiece.