Auto Stocks May Fall 10-15% More, But CLSA Sees Long-Term Opportunity

• CLSA cuts price targets and earnings estimates for major auto stocks including Maruti Suzuki, Tata Motors, and Bajaj Auto.
• Nifty Auto index corrected nearly 15% in three weeks due to West Asia crisis, supply chain hurdles, and commodity inflation.
• CLSA warns of potential 30-40% cuts to FY27 earnings if disruptions and high commodity prices persist for 2-3 months.
• Another 15% correction in auto stocks cannot be ruled out, similar to the 30-45% correction during the 2020 Covid-19 wave.
• Despite short-term risks, CLSA views a further correction as an attractive long-term buying opportunity, favoring M&M, Bajaj Auto, TVS Motor, Tata Motors PV, and Ashok Leyland.