Top 5 Fastest Growing Automobile Stocks to Watch Out for in 2025

The automobile industry in India is one of the largest and most dynamic. It's a major contributor to the country's GDP and a major employment generator as well.

Over the years, the industry has experienced remarkable growth, making India the third-largest automobile market globally by 2023, surpassing Japan.

The electric vehicle (EV) segment in particular is witnessing rapid expansion, with the Indian government targeting 30% EV adoption by 2030.

India is also a global automobile manufacturing hub, attracting 100% foreign direct investment (FDI) under the automatic route.

Major players such as Maruti Suzuki, Hyundai, Tata Motors, Bajaj Auto, Mahindra & Mahindra, and TVS continue to expand their operations, while global brands like Tesla, Kia, and BMW are eyeing India's growing market.

Two recent events - the Union Budget and the RBI monetary policy - can boost the industry further.

The Union Budget 2025 encouraged local manufacturing, supporting the growth of electric vehicles, and offered tax relief (thereby increasing purchasing power).

It also includes provisions for the MSMEs and all measures to create a robust foundation for the Indian automobile industry.

Meanwhile, the Reserve Bank of India (RBI) governor Sanjay Malhotra reduced policy rates for the first time in about five years, helping lower financing costs for homes, cars, or other discretionary purchases for middle-class shoppers thereby boosting consumption of cars in the future.

In this article, we will explore the fastest growing automobile stocks in India in 2025.

These stocks are filtered using Equitymaster's powerful stock screener.

#1 Tunwal-E-Motors

Tunwal E-Motors, established in December 2018, is an Indian EV manufacturer specialising in the design, development, production, and distribution of electric two-wheelers.

The company offers a diverse portfolio of over 23 models with a presence in 19 states across India, facilitated by a network of over 256 dealerships catering to various customer needs.

Tunwal isn't just riding the EV wave, it's blazing down the highway of success with a scorching 333.9% 3-year CAGR in revenue and a turbocharged 447.7% 3-year CAGR in profit!

The company is experiencing rapid growth due to the increasing demand for EVs in India, driven by rising fuel prices and government incentives like the FAME II scheme.

The company also has a competitive advantage in the market. Unlike big players focusing only on premium models, Tunwal targets budget-conscious buyers. The company's scooters are cheaper to maintain and operate compared to petrol scooters.

Tunwal has demonstrated impressive financial performance in recent years. As of March 2024, the company achieved a Return on Equity (ROE) of 57.5% and a Return on Capital Employed (RoCE) of 76.6%.

It launched its IPO in July 2024, aiming to raise Rs 1.1 billion (bn). Upon listing on 23 July 2024, Tunwal E-Motors' shares debuted at Rs 64 per share, an 8.5% premium over the issue price.

Going forward, the company's goal is to become the most trusted and innovative EV brand in India by 2029. The company aims to expand the dealership network to ensure nationwide accessibility to its EVs.

Tunwal also aims to diversify into new segments, such as electric commercial vehicles and advanced battery solutions.

#2 Ashok Leyland

Ashok Leyland, established in 1948, is a prominent Indian automotive manufacturer headquartered in Chennai. As the flagship company of the Hinduja Group, it stands as the second-largest manufacturer of commercial vehicles in India and the fourth-largest bus manufacturer globally.

The company's diverse product range includes trucks, buses, defence vehicles, and engines for industrial and marine applications.

Ashok Leyland has reported a 33% 3-year CAGR in revenue but a negative 3-year CAGR in profits.

The growth over the past three years can be attributed to a combination of strong market demand, strategic expansion, and operational efficiency.

The post-pandemic economic revival, coupled with increased infrastructure spending and a booming e-commerce sector, has significantly boosted the demand for commercial vehicles.

The company has successfully expanded its market share, particularly in the medium and heavy commercial vehicle (M&HCV) segment, by capitalizing on fleet modernization trends.

Beyond domestic success, the company has aggressively expanded its global footprint, leveraging exports as a key revenue stream.

As of 31 March 2024, Ashok Leyland reported a ROE of 30.1% and RoCE also improved, standing at 19.9% in FY24.

In 2025, Ashok Leyland has continued to strengthen its market presence through strategic collaborations and partnerships.

Going forward, the company aims to achieve carbon-neutral operations by 2030, reflecting its commitment to reducing its environmental footprint.

Looking beyond 2030, the company has set a target to achieve net-zero emissions by 2048, aligning with long-term sustainability objectives.

#3 Maruti Suzuki India

Maruti Suzuki India, the country's leading automobile manufacturer, has been a pioneer in shaping India's car market since its inception in 1981.

Holding over 40% market share in the passenger vehicle segment, the company is known for its affordable, reliable, and fuel-efficient cars, including popular models like the Swift, Baleno, and Grand Vitara.

Maruti Suzuki has been hitting the fast lane with a turbocharged 26.3% CAGR in revenue and an even sleeker 45.4% CAGR in profit over the past three years.

The remarkable growth over the past three years has been driven by strong market demand, strategic product expansion, and operational efficiency.

As India's leading carmaker, it capitalized on the post-pandemic recovery, benefiting from a surge in sales across all segments, particularly SUVs like the Grand Vitara, Brezza, and Fronx, which fuelled its premiumization strategy.

The company also strengthened its CNG and hybrid vehicle lineup to cater to cost-conscious and eco-friendly buyers, addressing rising fuel prices and sustainability concerns.

Additionally, the easing of the semiconductor shortage allowed Maruti to ramp up production and meet demand efficiently. Its competitive pricing, cost optimization, and strong financing options made vehicles more accessible, especially in rural and semi-urban markets.

In FY24, the company reported a ROE of 15.8% and RoCE of 20.6%.

The company has deepened its collaboration with Toyota, leading to the co-development of models such as the Grand Vitara SUV. The partnership is set to expand with plans for a new battery electric vehicle (BEV), reflecting a shared commitment to sustainable mobility.

Maruti is set to produce its first-ever electric vehicle, a compact SUV, for Toyota. Production is scheduled to commence in spring 2025 at Maruti's Gujarat plant.

Going forward, in a regulatory filing, Maruti Suzuki outlined plans to invest approximately Rs 1,250 bn by FY31. This substantial investment aims to enhance the company's production capacity and expand its product lineup from the current 17 models to 28.

The company is targeting a significant increase in its overseas shipments by 2030, with plans to triple exports in the next six years. This strategy focuses on establishing self-reliance in the value chain and deep localization to meet global demand effectively.

#4 TVS Motor Company

TVS Motor Company, established in 1979, is a prominent Indian multinational automotive manufacturer headquartered in Chennai, Tamil Nadu.

The company offers a diverse range of products, including motorcycles, scooters, mopeds, and three-wheelers. Notable models encompass the Apache series, Raider, Ronin, Jupiter, and Ntorq. TVS has also ventured into electric mobility with the iQube Electric scooter.

TVS Motor Company is blazing through the fast lane with a scorching 26.3% 3-year CAGR in revenue, while profits have hit overdrive at a lightning-fast 43.1% 3-year CAGR.

The rising demand for two-wheelers, particularly in the premium and performance segments, fuelled strong sales of models like the Apache, Raider, and Ntorq.

Simultaneously, the company made a bold entry into the EV space with the TVS iQube Electric, capitalizing on India's shift toward green mobility.

Expanding its global footprint, TVS significantly increased exports to over 80 countries, reinforcing its presence in international markets.

Strategic collaborations, such as its partnership with BMW Motorrad for premium motorcycles and the acquisition of Norton Motorcycles, further enhanced its brand positioning and technological expertise.

As FY24, the company reported a ROE of 26.2% and a RoCE of 23.9%.

In January 2025, TVS and Hyundai Motor Company announced a collaboration to develop advanced electric three-wheelers and micro four-wheelers, aiming to enhance last-mile mobility solutions in India.

Additionally, TVS expanded its international presence by entering the Moroccan market, launching two showrooms in Casablanca and Marrakech. This move is part of TVS's strategy to strengthen its footprint in Africa and cater to the rising demand for two-wheelers in the region.

Going forward, the company plans to invest approximately Rs 39 bn over the next four to five years to enhance its green portfolio, including the development of new electric and internal combustion engine platforms in collaboration with BMW Motorra.

TVS is also committed to profitable operations overseas, particularly in Asian markets, by capitalizing on its expertise in manufacturing, technology, and marketing.

#5 Bajaj Auto

Bajaj Auto, established in 1945, is an Indian multinational automotive manufacturing company headquartered in Pune, Maharashtra.

It is a part of the Bajaj Group and specializes in the production of motorcycles, scooters, and auto rickshaws.

Bajaj Auto has been burning rubber on the growth highway, clocking a scorching 17.4% CAGR in revenue over the past three years, while profits have taken off an electrifying 16.6% CAGR.

Bajaj Auto's explosive growth over the past three years can be attributed to a perfect blend of innovation, global expansion, and a strong product strategy.

The company dominated the premium motorcycle segment with the continued success of the Pulsar, Dominar, and Avenger series, while its strategic partnerships with KTM, Husqvarna, and Triumph unlocked new markets and customer segment.

Bajaj Auto has significantly bolstered its international presence, particularly in Latin America, Africa, and select Asian markets.

In January 2025, Bajaj Auto's sales increased by 7% due to a rise in exports of two-wheelers and commercial vehicles. In December 2024, Bajaj Auto's market share in the e-2W segment surpassed 25%. PLI incentives have helped Bajaj Auto's operating profits.

As of FY24, Bajaj reported a ROE of 26.7% and a RoCE of 34.1%.

The company has earmarked approximately Rs 8 bn for capital expenditures in FY25. This investment is directed towards the development and phased launch of a new Compressed Natural Gas (CNG) motorcycle, aiming to cater to the growing demand for alternative fuel vehicles.

Bajaj plans to launch CNG motorcycle in phases, with a target of selling 40,000 units by the end of FY25, catering to consumers seeking cost-effective and eco-friendly transportation options.

Going forward, the company plans to enter the domestic e-rickshaw market by the end of the current financial year, targeting the growing demand for electric three-wheelers in urban areas.

Snapshot of Fastest Growing Automobile Stocks on Equitymaster's Stock Screener

Here's a table showing the above companies across various important parameters -

Conclusion

India's automobile sector is undergoing a transformative phase, driven by rising demand, technological advancements, and the shift toward electric mobility.

The fastest-growing stocks in this sector belong to companies that have successfully adapted to changing market trends, such as Tata Motors, Maruti Suzuki, Bajaj Auto, and TVS Motor Company.

These industry leaders have consistently demonstrated strong revenue and profit growth, backed by strategic investments in EVs, alternative fuel vehicles, and global expansion.

On the other side, the sector comes along with some challenges.

While investing in growth stocks is a good strategy, growth alone cannot be the parameter for stock selection:

Growth with minimal or zero profits does not work while poor return ratios would also be a red flag. Even high debt and growth don't go hand in hand.

While growth is good, make sure that the company is clear of red flags of low profits, low ROCE and high debt.

Investors should also consider corporate governance as part of their due diligence before making any investment decisions.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...