The auto and NBFC sectors each offer distinct growth opportunities. While the auto sector benefits from innovation and rising demand, NBFCs offer steady growth through financial services. Investors should consider market trends, economic conditions, and risk factors before making investment decisions in either sector.
Table of Contents
Auto Sector Overview
The auto sector is a key driver of economic growth, with global demand for vehicles steadily increasing. Innovations in electric vehicles (EVs), autonomous driving, and green technologies are shaping the future, attracting significant investment. The sector also benefits from rising disposable incomes and urbanization.
However, the auto industry faces challenges such as fluctuating raw material costs, supply chain disruptions, and changing government regulations. Market competition is fierce, with established players and new entrants vying for market share. Companies must focus on sustainability and technological advancements to stay ahead in a rapidly evolving market.
NBFC Sector Overview
The NBFC sector is a significant contributor to India’s financial ecosystem, providing a wide range of financial services, including loans, asset management, and insurance. It bridges the gap left by traditional banks, offering easier access to credit and financial inclusion.
With a growing middle class and increased demand for financial services, NBFCs have witnessed robust growth. The sector’s expansion is further supported by government initiatives aimed at financial inclusion and digitization. However, regulatory challenges and the need for capital adequacy continue to pose risks.
Best Stocks In The Auto Sector
The table below shows the best stocks in the Auto sector based on a 1Y return.
| Name | Close Price (Rs) | 1Y Return (%) |
| Mahindra and Mahindra Ltd | 2,864.20 | 36.6 |
| TVS Motor Company Ltd | 2,737.90 | 36.5 |
| Ashok Leyland Ltd | 225.04 | 26.64 |
| UNO Minda Ltd | 892.05 | 24.44 |
| Eicher Motors Ltd | 5,575.50 | 20.81 |
| TVS Holdings Ltd | 9,387.50 | 11.3 |
| Balkrishna Industries Ltd | 2,518.20 | 5.33 |
| Samvardhana Motherson International Ltd | 133.71 | 5.12 |
| MRF Ltd | 1,28,655.00 | -0.75 |
| Endurance Technologies Ltd | 1,922.10 | -1.8 |
Top Stocks In The NBFC Sector
The table below shows the top stocks in the NBFC sector based on a 1Y return.
| Name | Close Price (Rs) | 1Y Return (%) |
| JSW Holdings Ltd | 25,960.00 | 272.13 |
| Cholamandalam Financial Holdings Ltd | 1,980.30 | 81.04 |
| Bajaj Holdings and Investment Ltd | 12,198.00 | 48.75 |
| Cholamandalam Investment and Finance Company Ltd | 1,543.50 | 33.6 |
| Shriram Finance Ltd | 655.2 | 31.47 |
| Muthoot Finance Ltd | 2,093.20 | 26.47 |
| Rail Vikas Nigam Ltd | 361.2 | 25.79 |
| Bajaj Finance Ltd | 9,112.00 | 24.91 |
| HDFC Asset Management Company Ltd | 4,382.50 | 18.84 |
| Motilal Oswal Financial Services Ltd | 694.9 | 12.82 |
Fundamental Analysis Of The Auto Sector
Mahindra and Mahindra Ltd
Mahindra and Mahindra Ltd, founded in 1945 and headquartered in Mumbai, is a leading Indian multinational automotive manufacturer. It produces SUVs, commercial vehicles, tractors, and electric vehicles. The company is part of the Mahindra Group and is known for its global presence and focus on innovation and sustainability.
Market Cap: ₹3,43,562.52 Crore
Close Price: ₹2,864.20
1Y Return: 36.6%
1M Return: 4.43%
6M Return: 5.27%
5Y average net Profit Margin: 5.11%
5Y CAGR: 53.66%
Sector: Four Wheelers
TVS Motor Company Ltd
TVS Motor Company Ltd, established in 1978, is a flagship company of the TVS Group. Headquartered in Chennai, it is India’s third-largest two-wheeler manufacturer. TVS is known for producing motorcycles, scooters, and mopeds, with a strong presence in international markets and a focus on electric mobility.
Market Cap: ₹1,29,978.00 Crore
Close Price: ₹2,737.90
1Y Return: 36.5%
1M Return: 13.77%
6M Return: 11.76%
5Y average net Profit Margin: 3.58%
5Y CAGR: 55.93%
Sector: Two Wheelers
Ashok Leyland Ltd
Ashok Leyland Ltd, founded in 1948 and based in Chennai, is one of India’s largest commercial vehicle manufacturers. It produces trucks, buses, and defense vehicles. A flagship of the Hinduja Group, Ashok Leyland has a global presence in over 50 countries and emphasizes sustainable transport solutions.
Market Cap: ₹66,083.61 Crore
Close Price: ₹225.04
1Y Return: 26.64%
1M Return: 7.33%
6M Return: 5.16%
5Y average net Profit Margin: 1.51%
5Y CAGR: 38.01%
Sector: Trucks & Buses
UNO Minda Ltd
UNO Minda Ltd, originally established in 1958, is a leading global manufacturer of automotive components and systems. Headquartered in Gurugram, the company supplies lighting, acoustics, switches, and alloy wheels to major OEMs. With manufacturing across India and abroad, it focuses on innovation and mobility technology.
Market Cap: ₹51,218.29 Crore
Close Price: ₹892.05
1Y Return: 24.44%
1M Return: -6.91%
6M Return: -4.43%
5Y average net Profit Margin: 4.37%
5Y CAGR: 47.7%
Sector: Auto Parts
Eicher Motors Ltd
Eicher Motors Ltd, founded in 1948 and headquartered in New Delhi, is the parent company of Royal Enfield. It manufactures premium motorcycles and commercial vehicles in collaboration with Volvo Group. Eicher is known for reviving classic motorcycling culture and expanding into global markets with modern engineering.
Market Cap: ₹1,52,860.18 Crore
Close Price: ₹5,575.50
1Y Return: 20.81%
1M Return: 3.56%
6M Return: 21.43%
5Y average net Profit Margin: 18.02%
5Y CAGR: 32.62%
Sector: Trucks & Buses
TVS Holdings Ltd
TVS Holdings Ltd, formerly Sundaram-Clayton Ltd, is part of the TVS Group and was incorporated in 1962. It serves as a holding company with interests in automotive components, logistics, and financial services. Based in Chennai, it plays a strategic role in the group’s diversified automotive portfolio.
Market Cap: ₹21,562.77 Crore
Close Price: ₹9,387.50
1Y Return: 11.3%
1M Return: 5.23%
6M Return: -23.42%
5Y average net Profit Margin: 1.78%
5Y CAGR: 50.59%
Sector: Auto Parts
Balkrishna Industries Ltd
Balkrishna Industries Ltd (BKT), founded in 1987, specializes in off-highway tire manufacturing for agricultural, industrial, and construction vehicles. Headquartered in Mumbai, it exports to over 160 countries. BKT is known for its strong R&D, global reach, and sponsorships in sports to boost brand visibility.
Market Cap: ₹48,681.13 Crore
Close Price: ₹2,518.20
1Y Return: 5.33%
1M Return: -1.97%
6M Return: -13.39%
5Y average net Profit Margin: 16.12%
5Y CAGR: 23.75%
Sector: Tires & Rubber
Samvardhana Motherson International Ltd
Samvardhana Motherson International Ltd, founded in 1986, is a global auto component giant headquartered in Noida. It offers wiring harnesses, mirrors, lighting, and polymer modules to global OEMs. With operations in over 40 countries, it is a trusted Tier 1 supplier to the automotive industry.
Market Cap: ₹94,082.30 Crore
Close Price: ₹133.71
1Y Return: 5.12%
1M Return: 0.83%
6M Return: -29.5%
5Y average net Profit Margin: 1.94%
5Y CAGR: 22.74%
Sector: Auto Parts
MRF Ltd
MRF Ltd (Madras Rubber Factory), established in 1946 in Chennai, is India’s largest tire manufacturer. It produces a wide range of tires for cars, trucks, and two-wheelers. MRF is also known for its presence in motorsports and strong brand equity in the Indian automotive market.
Market Cap: ₹54,564.43 Crore
Close Price: ₹1,28,655.00
1Y Return: -0.75%
1M Return: 12.68%
6M Return: 4.81%
5Y average net Profit Margin: 6.25%
5Y CAGR: 16.95%
Sector: Tires & Rubber
Endurance Technologies Ltd
Endurance Technologies Ltd, incorporated in 1999 and based in Aurangabad, is a leading auto component manufacturer. It supplies suspension, transmission, braking systems, and aluminum die-cast parts to two- and three-wheeler OEMs. With a strong presence in India and Europe, it focuses on innovation and quality.
Market Cap: ₹27,036.81 Crore
Close Price: ₹1,922.10
1Y Return: -1.8%
1M Return: -3.15%
6M Return: -19.11%
5Y average net Profit Margin: 6.82%
5Y CAGR: 26.87%
Sector: Auto Parts
Fundamental Analysis Of the NBFC Sector
JSW Holdings Ltd
JSW Holdings Ltd, incorporated in 2001, functions as a Non-Banking Financial Company (NBFC) and is primarily engaged in investment activities. It holds strategic stakes in JSW Group companies, especially JSW Steel. The company plays a key role in supporting the group’s expansion and financial planning initiatives.
Market Cap: ₹28,810.43 Crore
Close Price: ₹25,960.00
1Y Return: 272.13%
1M Return: 7.87%
6M Return: 172.5%
5Y average net Profit Margin: NA
5Y CAGR: 74.19%
Sector: Asset Management
Cholamandalam Financial Holdings Ltd
Founded in 1949, Cholamandalam Financial Holdings Ltd is part of the Murugappa Group. It operates as an NBFC and investment holding company with interests in financial services, insurance, and asset management. It supports subsidiaries like Cholamandalam Investment and Finance Company and Chola MS General Insurance in expanding financial outreach.
Market Cap: ₹37,185.57 Crore
Close Price: ₹1,980.30
1Y Return: 81.04%
1M Return: 8.39%
6M Return: 10.65%
5Y average net Profit Margin: NA
5Y CAGR: 47.76%
Sector: Diversified Financials
Bajaj Holdings and Investment Ltd
Bajaj Holdings and Investment Ltd, established in 1945, is a core investment company and part of the Bajaj Group. It holds significant equity in Bajaj Auto, Bajaj Finserv, and Bajaj Finance. The company generates income mainly through dividends, interest, and capital appreciation from its portfolio.
Market Cap: ₹1,35,755.82 Crore
Close Price: ₹12,198.00
1Y Return: 48.75%
1M Return: -1.59%
6M Return: 20.1%
5Y average net Profit Margin: NA
5Y CAGR: 45.33%
Sector: Asset Management
Cholamandalam Investment and Finance Company Ltd
Cholamandalam Investment and Finance Company Ltd, founded in 1978, is a leading NBFC under the Murugappa Group. It provides vehicle finance, home loans, SME loans, and other financial products. With a strong presence in rural and semi-urban India, it plays a vital role in inclusive financial services.
Market Cap: ₹1,29,799.23 Crore
Close Price: ₹1,543.50
1Y Return: 33.6%
1M Return: 0.43%
6M Return: 12.48%
5Y average net Profit Margin: NA
5Y CAGR: 63.3%
Sector: Consumer Finance
Shriram Finance Ltd
Shriram Finance Ltd, formed through the merger of Shriram Transport and Shriram City Union Finance, is one of India’s largest retail NBFCs. Established under the Shriram Group, it specializes in commercial vehicle finance, personal and business loans, and serves millions of customers across India.
Market Cap: ₹1,23,202.75 Crore
Close Price: ₹655.20
1Y Return: 31.47%
1M Return: 2.19%
6M Return: 5.93%
5Y average net Profit Margin: NA
5Y CAGR: 38.15%
Sector: Consumer Finance
Muthoot Finance Ltd
Established in 1939, Muthoot Finance Ltd is India’s largest gold loan NBFC. Headquartered in Kerala, it offers quick loans against gold assets along with diversified financial services like insurance, money transfer, and housing finance. The company serves over 2 lakh customers daily through thousands of branches.
Market Cap: ₹84,034.42 Crore
Close Price: ₹2,093.20
1Y Return: 26.47%
1M Return: -9.95%
6M Return: 8.82%
5Y average net Profit Margin: NA
5Y CAGR: 20.79%
Sector: Consumer Finance
Rail Vikas Nigam Ltd
Rail Vikas Nigam Ltd (RVNL), incorporated in 2003, is a PSU under the Ministry of Railways. It undertakes project development, execution, and implementation for Indian Railways infrastructure projects, including new lines, doubling, electrification, and metro works. RVNL is instrumental in India’s rail capacity enhancement and modernization.
Market Cap: ₹75,310.93 Crore
Close Price: ₹361.20
1Y Return: 25.79%
1M Return: -3.01%
6M Return: -13.95%
5Y average net Profit Margin: NA
5Y CAGR: 83.63%
Sector: Specialized Finance
Bajaj Finance Ltd
Bajaj Finance Ltd, a subsidiary of Bajaj Finserv, was established in 1987. It is a diversified NBFC offering consumer finance, SME lending, commercial lending, and wealth management. Known for digital innovation and strong asset quality, it serves over 70 million customers across India with an expansive product suite.
Market Cap: ₹5,65,684.23 Crore
Close Price: ₹9,112.00
1Y Return: 24.91%
1M Return: 2.13%
6M Return: 31.86%
5Y average net Profit Margin: NA
5Y CAGR: 35.75%
Sector: Consumer Finance
HDFC Asset Management Company Ltd
Incorporated in 1999, HDFC Asset Management Company Ltd is one of India’s leading mutual fund houses. It operates under a joint venture between HDFC Ltd and ABRDN plc (UK). With a strong distribution network and trusted brand value, it manages a wide range of equity, debt, and hybrid funds.
Market Cap: ₹93,694.82 Crore
Close Price: ₹4,382.50
1Y Return: 18.84%
1M Return: 10.06%
6M Return: 0.93%
5Y average net Profit Margin: NA
5Y CAGR: 12.54%
Sector: Asset Management
Motilal Oswal Financial Services Ltd
Founded in 1987, Motilal Oswal Financial Services Ltd is a diversified financial services firm. It offers broking, asset management, investment banking, and wealth management services. Known for its research-driven approach, the company serves retail, HNI, and institutional clients across India through a robust digital and physical network.
Market Cap: ₹41,646.32 Crore
Close Price: ₹694.90
1Y Return: 12.82%
1M Return: 15.43%
6M Return: -20.31%
5Y average net Profit Margin: NA
5Y CAGR: 42.1%
Sector: Diversified Financials
Auto Sector Performance & Growth
The table below shows the Auto sector’s performance & growth based on a 5-year net profit margin.
| Name | Close Price (Rs) | 5Y Avg Net Profit Margin (%) |
| Eicher Motors Ltd | 5,575.50 | 18.02 |
| Sona BLW Precision Forgings Ltd | 453.65 | 17.9 |
| Bajaj Auto Limited | 8,034.00 | 16.52 |
| Balkrishna Industries Ltd | 2,518.20 | 16.12 |
| Hero MotoCorp Ltd | 3,895.50 | 9.31 |
| Bosch Ltd | 27,995.00 | 8.76 |
| Maruti Suzuki India Ltd | 11,698.00 | 7.1 |
| Endurance Technologies Ltd | 1,922.10 | 6.82 |
| MRF Ltd | 1,28,655.00 | 6.25 |
| Mahindra and Mahindra Ltd | 2,864.20 | 5.11 |
NBFC Sector Performance & Growth
The table below shows the NBFC sector’s performance & growth based on a 5-year net profit margin.
| Name | Close Price (Rs) | 5Y Avg Net Profit Margin (%) |
| Bajaj Holdings and Investment Ltd | 12,198.00 | 91.95 |
| JSW Holdings Ltd | 25,960.00 | 84.73 |
| Tata Investment Corporation Ltd | 6,128.50 | 80.56 |
| Nippon Life India Asset Management Ltd | 640.2 | 46.65 |
| Muthoot Finance Ltd | 2,093.20 | 31.34 |
| Motilal Oswal Financial Services Ltd | 694.9 | 30.24 |
| Indian Railway Finance Corp Ltd | 128.8 | 26.36 |
| REC Limited | 422.2 | 24.72 |
| Housing and Urban Development Corporation Ltd | 220.24 | 23.88 |
| Bajaj Finance Ltd | 9,112.00 | 22.56 |
Government Policies & Incentives For The Auto And NBFC Sector
The Indian government has introduced several initiatives to support the automotive sector, focusing on electric vehicles (EVs), advanced manufacturing technologies, and subsidies. Policies like the Electric Mobility Promotion Scheme and Production-Linked Incentive schemes drive growth in electric and green technologies.
For the NBFC sector, the government has implemented measures like the Partial Credit Guarantee Scheme to ease access to funding. Additionally, the Reserve Bank of India’s relaxed restrictions and focus on financial inclusion provide essential support, ensuring smoother operations for NBFCs in the rapidly evolving financial landscape.
Challenges Faced By the Auto And NBFC Sector
The main challenges faced by the auto and NBFC sectors include supply chain disruptions, regulatory changes, funding issues, and competition. These hurdles significantly impact their growth and operational efficiency.
- Supply Chain Disruptions: Both sectors face challenges related to raw material shortages, logistics delays, and rising costs, affecting production and service delivery.
- Regulatory Changes: Frequent regulatory updates in both sectors require compliance and adjustments, leading to increased operational costs and uncertainties in the business environment.
- Funding Issues: NBFCs face difficulties in raising capital, impacting their lending capacity, while the auto sector struggles with financing vehicle production and sales due to market conditions.
- Competition: Intense competition from both domestic and international players forces both sectors to innovate continuously and maintain profitability amidst price pressures and market saturation.
Future Outlook Of Auto And NBFC Sector
The Indian automotive sector is poised for steady growth, driven by rising demand for two-wheelers, SUVs, and electric vehicles (EVs). Government incentives, such as the Production-Linked Incentive (PLI) scheme and exemptions on critical minerals, support domestic manufacturing. However, challenges like high input costs and regulatory hurdles may impact margins.
The Non-Banking Financial Companies (NBFCs) sector anticipates robust growth, with assets under management (AUM) projected to increase by 15–17% in FY25. This expansion is fueled by strong credit demand from salaried professionals, retail, MSME, and infrastructure segments. However, funding challenges and potential asset quality concerns require careful monitoring.
How Do You Invest In Auto And NBFC Sector Stocks?
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Step 1: Open a Demat & Trading Account
- Visit Alice Blue’s website
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Step 2: Add Funds to Your Trading Account
- Log in to Alice Blue and go to the Funds section.
- Add money via UPI, Net Banking, or NEFT/RTGS for smooth transactions.
Step 3: Search & Analyze Auto Sector and NBFC Sector Stocks
- Use the search bar to find the Auto Sector and NBFC Sector shares.
- Check the market price, charts, and company details before investing.
Step 4: Place Your Buy Order
- Click Buy and choose Market Order (instant purchase) or Limit Order (buy at your set price).
- Enter the quantity and confirm your order.
Difference Between NBFC Sector And Auto Sector – Conclusion
- The auto sector is evolving with EVs and technology, driven by economic growth, but faces challenges like supply chain disruptions and fierce competition.
- The NBFC sector contributes significantly to India’s financial system by offering loans, asset management, and insurance, supported by growing demand and government initiatives.
- The government supports the auto sector through EV incentives and manufacturing schemes, while NBFCs benefit from funding schemes and regulatory relaxation for growth and inclusion.
- Both the auto and NBFC sectors face challenges like supply chain disruptions, regulatory changes, funding issues, and intense competition, affecting growth and operational efficiency.
- The auto sector shows growth potential with EV and demand expansion, while NBFCs are set to grow through credit demand, despite funding challenges and asset quality concerns.
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Auto Sector Vs NBFC Sector – FAQs
The auto sector includes companies involved in the manufacturing, marketing, and servicing of motor vehicles such as cars, two-wheelers, and commercial vehicles. It plays a crucial role in economic development, innovation, employment generation, and the promotion of mobility solutions.
The NBFC (Non-Banking Financial Company) sector includes financial institutions that provide banking-like services such as loans, asset financing, and investment without holding a banking license. They play a vital role in credit delivery, especially in underserved and rural areas.
The main difference between the Auto sector and the NBFC sector lies in the function of these sectors. The auto sector focuses on producing vehicles, while the NBFC sector provides financial services. NBFCs facilitate credit and investment, whereas auto companies manufacture tangible goods related to transportation and mobility solutions.
Best Stocks In The Auto Sector #1: Tata Motors Ltd
Best Stocks In The Auto Sector #2: Sona BLW Precision Forgings Ltd
Best Stocks In The Auto Sector #3: Hero MotoCorp Ltd
Best Stocks In The Auto Sector #4: ZF Commercial Vehicle Control Systems India Ltd
Best Stocks In The Auto Sector #5: Maruti Suzuki India Ltd
Best Stocks In The Auto Sector based on 1-year return.
Best Stocks In The NBFC Sector #1: JSW Holdings Ltd
Best Stocks In The NBFC Sector #2: Cholamandalam Financial Holdings Ltd
Best Stocks In The NBFC Sector #3: Bajaj Holdings and Investment Ltd
Best Stocks In The NBFC Sector #4: Cholamandalam Investment and Finance Company Ltd
Best Stocks In The NBFC Sector #5: Shriram Finance Ltd
Best Stocks In The NBFC Sector based on 1-year return.
The future of the NBFC sector appears promising with increasing financial inclusion, digital lending, and rural credit demand. Supportive regulations and rising consumption are expected to further boost the role of NBFCs in India’s credit ecosystem.
NBFCs face challenges such as credit risk, liquidity issues, regulatory pressures, and competition from banks. Market volatility, borrower defaults, and economic slowdowns can also impact their profitability, requiring strong governance and risk management practices.
Yes, NBFC stocks offer good growth potential due to rising demand for credit and the underbanked segments. However, investors should consider asset quality, regulatory changes, and company fundamentals before investing in this high-growth but sensitive financial sector.
Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
