HDFC Securities forecasts muted Q1 FY26 auto earnings, citing weak demand, rising costs, and regulatory pressures across the sector.

• TVS, Eicher, and Mahindra may outperform on execution, but margin pressure expected industry-wide due to input costs.
• OBD-2 norms, AC cabin rules impact two-wheeler and CV makers; ancillaries face freight costs, Bhuj risks.
• Rare earth magnet shortage threatens EV and ICE output; adds Ather, Ashok Leyland to picks, retains Maruti, Hero buys.