HDFC Securities expects muted earnings for India’s auto sector in Q1

** HDFC Securities expects muted earnings for India's auto sector in Q1 FY26, citing weak demand, rising input costs, and regulatory headwinds

** Brokerage sees TVS TVSMOTOR, Eicher EICHERMOT, and Mahindra & Mahindra M&M outperforming on the back of strong product mix and execution, but warns that margins across the manufacturers will be hit

** Two-wheeler and commercial vehicle makers face added pressure from new OBD-2 norms and AC cabin mandates - HDFC Securities

** Auto ancillaries are exposed to global headwinds, with Balkrishna Industries BALKRISIND expected to be hurt by freight costs and Bhuj plant risks

** HDFC Securities highlights rare earth magnet shortage as a near-term risk to EV and ICE production, with India's reliance on China adding cost and quality concerns

** Adds Ather Energy ATHERENERG and Ashok Leyland ASHOKLEY to top picks, prefers Bharat Forge BHARATFORG for defense exposure, and retains "buy" rating on Maruti (MRTI), Hero MotoCorp HEROMOTOCO, and Mahindra