December gross sales knowledge underscores this enhancing outlook. Main gamers, together with Ashok Leyland, Tata Motors, and Drive Motors, reported year-on-year gross sales progress of as much as 50% through the month. At an trade degree, home business automobile dispatches rose 26% year-on-year and 16% month-on-month, signalling a broad-based restoration in volumes and a strengthening demand atmosphere. Buyers have additionally been richly rewarded by the rally in these shares, with Ashok Leyland gaining over 60% in 2025, whereas Drive Motors emerged as a standout performer, delivering returns of greater than 200% through the yr.
The uptick in gross sales has not gone unnoticed by analysts, who imagine the latest rebound may mark the early levels of a extra sustained restoration for the sector. “Demand traits appear optimistic for all segments inside CVs, with present demand momentum more likely to stay intact within the coming months, given the optimistic sentiment and beneficial lead indicators reminiscent of sustained private and non-private infrastructure demand,” Motilal Oswal mentioned in a report dated January 1.
Analysts at Axis Securities echo the identical optimism. The brokerage expects excessive single-digit trade progress for business automobile gamers in FY26, supported largely by enhancing demand within the bus section. To place issues in perspective, Ashok Leyland reported a 44% YoY improve in M&HCV and bus gross sales in December.
Rising demand amid beneficial levers has additionally been mirrored within the sturdy efficiency of tractor gamers. In December alone, volumes grew 36% year-on-year, supported by beneficial monsoons and wholesome reservoir ranges. Mahindra & Mahindra led the section with a 37% year-on-year improve, adopted by Escorts with 36% progress and VST Tillers with a 26% rise. Looking forward to the second half, analysts count on the optimistic momentum to proceed, aided by GST reductions, greater reservoir ranges, sturdy rabi sowing, and an improved kharif harvest.
Worldwide brokerage BofA Securities mentioned a number of structural drivers are supporting the tractor section past the good thing about a great monsoon and the sentiment enhance from the GST charge reduce. These embrace growing crop diversification, which is driving greater ranges of farm mechanisation, continued coverage help, and the emergence of further rural revenue streams reminiscent of ethanol mixing, livestock, and horticulture, supplementing conventional crop farming.
For M&M, the world’s largest tractor participant by quantity, HSBC analysts see sturdy positioning this yr. “Its gentle business automobile (LCV) enterprise has practically a 50% market share within the LCV items trade and, in our view, is essentially the most under-rated enterprise,” the brokerage mentioned.It isn’t simply consultants; administration additionally sees sturdy prospects within the coming quarters. For example, Tata Motors’ MD and CEO Girish Wagh mentioned, “Tata Motors registered double-digit gross sales progress in Q3FY26, powered by a powerful rebound in building and mining exercise put up the prolonged monsoon, together with sustained demand from core sectors and auto logistics. Going ahead, we count on demand to strengthen in Q4FY26 throughout most business automobile segments. Key drivers in 2026 will embrace the federal government’s sustained infrastructure push and growth in end-use sectors, each of that are anticipated to gasoline optimistic momentum for the trade.”
“The CV trade continued its momentum in December throughout all segments, supported by beneficial coverage adjustments and supportive demand drivers. With the trade exhibiting early indicators of an upcycle, we count on additional acceleration in This fall, “M&M’s administration mentioned whereas declaring its December gross sales.
The enhancing demand atmosphere, supportive coverage measures and inspiring commentary from each analysts and firm administration recommend that the business automobile cycle could also be on the cusp of a restoration. Whereas dangers from macro volatility and price pressures stay, early indicators level to strengthening momentum heading into 2026
(Disclaimer: The suggestions, ideas, views, and opinions given by the consultants are their very own. These don’t signify the views of The Financial Occasions.)
