As India looks to attract global EV makers, these five companies could win big
Companies approved under the scheme will be able to import 8,000 electric cars valued at $35,000 or more at the subsidised rate each year.
However, there’s a condition. The lower duty will apply only if the company commits to investing ₹4,150 crore to manufacture electric cars in India within three years of receiving approval.
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The scheme also promotes the Make in India initiative by mandating a minimum domestic value addition of 25% within three years and 50% within five years.
As such, these five companies stand to benefit from the scheme in the long run.
#1 Sona Comstar
Sona Comstar is one of India’s leading manufacturers of precision-forged differential bevel gears and differential assemblies for various types of vehicles.
It derives 71% of its revenue from passenger vehicles. It has an 8.8% market share in global differential gears and 4.4% in starter motors. Exports account for 71% of its revenue, while the rest comes from India.
It has global clients, including 7 of the top 10 passenger vehicle manufacturers. Clients include Tata, Maruti Suzuki, John Deere, Mahindra & Mahindra, and Tesla.
It’s also a major player in the battery electric vehicle (BEV) segment, which accounts for 36% of its revenue.
The company’s revenue grew 12% to ₹3,550 crore in FY25 thanks to a 38% increase in revenue from the BEV segment. Margin was 27.4%, leading to a 17% year-on-year increase in net profit to ₹600 crore.
The company’s net order book stood at ₹24,200 crore at the end of FY25. Of this, ₹18,700 crore was from EVs.
With a strong order book and a solid position in the EV sector, Sona Comstar is poised to benefit not only from domestic manufacturing but also from after-sales services.
#2 Tata Motors
Tata Motors is a leading global automobile company with strong fundamentals.
It sells passenger vehicles, utility vehicles and commercial vehicles in about 125 countries. It also has a presence in the premium passenger vehicle market through Jaguar Land Rover (JLR).
It leads the commercial vehicle segment in India and ranks third in passenger vehicles. It also dominates the electric vehicle segment with a 35% market share as of May.
With a lower import duty, Tata Motors can import JLR vehicles to India at a lower landing cost, which will help it gain an advantage in the luxury car segment.
With ongoing trade tensions, JLR will also shift part of its production to India, allowing it to benefit from lower costs and access to incentives under the manufacturing scheme.
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The company’s financials were subdued in FY25 owing to a sector-wide slowdown. Revenue fell 1.3% to ₹4.4 trillion, while net profit fell 11.5% to ₹28,150 crore.
The company is betting big on a strong rebound in the EV segment, where its volume fell 13% in FY25. It recently launched an electric version of the Harrier and plans to launch the Sierra, along with upgrades to its existing EV lineup, to boost demand.
It has also set an ambitious target of increasing its market share in passenger vehicles to 18-20% by FY30 from 13.2% in FY25.
Meanwhile, JLR faces major challenges owing to the ongoing trade war. Nevertheless, it plans to invest £18 bn over five years, which will be funded entirely from internal sources.
#3 Hyundai Motor India
Hyundai Motor India is India’s second-largest passenger vehicle company. It had a 14% market share in FY25, lagging behind Maruti Suzuki. It’s also the top vehicle exporter on a cumulative basis.
Hyundai has already expressed interest in the scheme to boost the manufacturing of electric passenger cars in India. With EVs accounting for 1% of its product mix, the company could be a beneficiary.
Hyundai has contributed significantly to the localisation plan, achieving 82% value addition in FY25.
Like Tata Motors, sectoral headwinds also hurt Hyundai in FY25. Revenue fell 0.9% to ₹69,200 crore owing to a fall in volumes. Net profit declined 6.9% to ₹5,640 crore.
The company aims to grow broadly in line with the industry. In FY26 it will focus on increasing exports, which accounted for 22% of its revenue.
Hyundai also plans to invest ₹7,000 crore to drive mid- to long-term growth. Its new plant in Talegaon, Maharashtra, will open in the second half of FY26. This is crucial for boosting volumes as its existing facility is already operating at more than 90% capacity.
While it expects an impact on profit before tax from depreciation on the new plant, it aims to maintain double-digit margins, in line with the FY25 margin of 12.9%.
#4 Exide Industries
Exide is India’s leading battery manufacturer, with a 50% market share in the domestic battery market. It has a diversified product portfolio, featuring batteries with capacities ranging from 2.5 ampere-hours (Ah) to 20,200 Ah.
As more companies adopt the scheme, Exide will benefit from increased demand for batteries. It expects Li-ion battery demand to reach 120 gigawatt-hours (GWh) by 2030 and is expanding aggressively to capitalise on the potential demand. It has announced a ₹3,600-crore investment in its Li-ion venture, Exide Energy Solutions.
Exide is in the advanced stages of setting up a 12 GWh greenfield lithium-ion cell manufacturing project. Of this, 6 GWh is expected to be commercialised in the ongoing financial year. The company has also signed a multi-year collaboration with SVOLT Technology, a leading Li-ion cell manufacturer, for Li-ion cell technology.
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The company’s performance in FY25 was subdued. Revenue rose just 4% to ₹17,200 crore, hurt by challenges in the infrastructure and telecom segments. Net profit declined 9.4% to ₹800 crore owing to high raw material costs and a write-off of slow-moving stock.
Nevertheless, the company expects a better FY26 owing to improving demand and price hikes implemented between February and April 2025. But it expects lower margins because of investments in capacity expansion.
#5 Landmark Cars
Landmark Cars is a multi-brand, multi-location premium and luxury auto retailer. It has partnerships with 10 leading brands including Mercedes-Benz, Honda, Jeep, Citroen, Volkswagen, BYD, MG Motors, Renault, Mahindra and Kia Motors. It manages 131 showrooms and has nine upcoming outlets.
The lower duty, along with local manufacturing, will benefit Landmark cars because of its partnerships with leading electric car companies such as BYD and MG Motors. Landmark Cars currently has eight BYD outlets and holds a 20.8% market share in the brand’s sales.
BYD, which imports its cars from China, now plans to establish a manufacturing facility in India. It stands to benefit significantly from the reduced import duty and incentives under the new scheme, as does Landmark, given its close partnership and role in distribution.
The company’s revenue increased 22.4% to ₹4,030 crore in FY25, driven by store expansion. However, net profit declined 70% to ₹170 crore owing to high depreciation of new outlets and finance costs.
It’s expanding rapidly thanks to fast-growing premium brands such as Mercedes, MG and Kia. It also plans to enter emerging high-growth cities such as Hyderabad, Jaipur and Patna. The full impact of new showrooms is expected to reflect in FY26 and FY27.
Conclusion
The new manufacturing scheme not only aims to reduce the cost of imported electric cars but also aligns with Make in India initiatives.
While companies have been allowed to import 8,000 vehicles at a lower rate, the mandatory domestic value addition of 25% within three years and 50% within five years augurs well for domestic manufacturers.
As such, electric car parts and accessories suppliers such as Sona Comstar and Exide are poised to benefit. Tata Motors, Landmark Cars and Hyundai stand to gain from increased local assembly, distribution partnerships, and a stronger electric product pipeline over time.
However, no matter how attractive the opportunity is, it’s always essential to carefully analyse the company’s fundamentals, corporate governance practices and growth strategies.
Happy investing!
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
