Auto Sector Eyes Budget for EV Incentives, Infra Boost; Ashok Leyland Top Pick

• The auto sector anticipates the upcoming Budget to provide clarity on EV incentives and government infrastructure spending, crucial for demand, especially in commercial vehicles.
• BNP Paribas analyst Kumar Rakesh identifies Budget-related triggers as key for investors, downplaying recent trade agreement concerns.
• Ashok Leyland is BNP Paribas' top stock pick, with the CV industry entering an upcycle, allowing manufacturers to better pass on rising input costs.
• Rakesh believes market fears regarding the India-EU FTA's impact on domestic OEMs are overstated, as CBUs are not the most relevant segment for India.
• The FTA is expected to improve profitability for European automakers in India and support premiumization, rather than disrupt the mass-market segment.

Why It Matters: Auto sector looks to Budget for EV and infrastructure support; Ashok Leyland is a top pick amidst an improving CV cycle.