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Informist, Saturday, Feb. 1, 2025 

MUMBAI – Shares of automobile and auto ancillary companies are expected to rise more next week on expectation of a boost in demand for the sector after the government announced salaried people earning up to INR 1.2 million will be exempted from paying income tax. This tax rebate by the government is expected to revive urban consumption, which has been sluggish in recent months, analysts said. 

"The focus on improving the spending power of the middle class in the form of changes in tax slabs is a much-needed boost for the consumption space," Mrunmayee Jogalekar, auto sector analyst at Asit C. Mehta Investment Interrmediatees, said in a post-budget note. Even at the higher end, the maximum tax rate of 30% will be applicable for incomes exceeding INR 2.4 million vs INR 1.5 million earlier, which will likely be a boost for fast-moving consumer goods and automotive players, which are seeing the impact of an urban demand slowdown, she said in the note. "For the auto sector, a focus on building a domestic ecosystem for electric vehicle batteries and a reduction in basic customs duty for critical minerals will help in improving the supply chain and long-term profitability of the sector", she said.

The Nifty Auto Saturday closed at 23305.45 points, up 1.9%. In the week gone by, the 15-stock index gained 5.1% and the index has fared better than benchmark indices. The Nifty 50 index and the BSE Sensex closed 1.7% higher this week. Of the 15 constituents, TVS Motor Company rose the most and closed 12.5% higher, followed by Mahindra & Mahindra and Hero MotoCorp. Shares of Bosch, Tata Motors, and Bharat Forge fell the most and ended down 3.4-5.5%. 

"For January, the sales for companies so far are good, especially Maruti Suzuki, reporting its highest ever monthly sales with a recovery seen in the small car segment which was primarily led by the rural market and also because of huge discounts," a research analyst tracking the auto sector at domestic brokerage, said. Maruti Suzuki sold a total of 212,251 units, up 6.5% which is the highest monthly sales the company has recorded since at least May 2020, according to the data.

"With a cut in interest rates expected at the coming monetary policy meeting in the coming week, it would likely benefit overall consumption and lower interest rates will likely enhance consumer purchasing power," the analyst said. Overall, everything looks positive for automobile stocks to move higher as of now, though sales numbers from Bajaj Auto and Hero MotoCorp are yet to be seen, the analyst said.

The Nifty Auto shows a bullish division and is expected to continue head directionally higher with select stocks like TVS Motors, Escort Kubota, and Mahindra & Mahindra likely to outperform others, Jigar Patel, technical analyst at Anand Rathi Shares and Stocks Brokers, said. Patel expects the sectoral index to find support at 22250 points and face resistance at 23500 points.

TOP HEADLINES

* BUDGET: Govt to ease funding for smooth sailing of shipping, maritime sector
* Eicher Motors' Jan commercial vehicle despatch volumes highest in FY25
* Maruti Suzuki Jan sales highest since May 2020; domestic PV sales up 4%
* Tata Motors Jan sales down 7% on year at 80,304 units due to lower PV sales
* Hyundai Motor despatches 65,603 cars in January, exports up 10.5% on year
* Ashok Leyland's January sales grow at fastest rate since May
* M&M sells highest PVs in three months in January; exports nearly double
* Escorts Kubota's tractor sales fall for third straight month in January
* Hero MotoCorp CEO Niranjan Gupta steps dn Apr 30, Kasbekar named acting CEO
* EconSurvey: Need EV sector policy to de-risk supply chain, cut China imports
* Bharat Forge to invest INR 820 mln more in subsidiary Kalyani Powertrain
* Busy Bee says can buy Go First as going concern, to reach out to lenders
* InterGlobe Aviation COO Wolfgang Prock-Schauer retires with effect from Thu
* Ola Electric set to unveil electric scooter based on Gen 3 platform Fri
* Analyst Concall: KPIT Tech expects deal pipeline to rise in next few qtrs
* Analyst Concall: Tata Motors expects demerger of ops to be effective by Oct
* Tata Motors bullish on EV growth story in India despite Trump backtrack
* Olectra Greentech Oct-Dec consol PAT rises 72% YoY to INR 463.26 million
* Analyst concall: Maruti Suzuki guides for 3.5% retail sales growth Jan-Mar
* Garden Reach, Apollo Micro sign MoU to power next-gen defence innovation
* Earnings Review: Tata Motors PAT down 22% on year, misses Street view
* Sona BLW, Ubifly Tech sign MoU to develop powertrain for aircraft, drones
* Earnings Review:KPIT Tech Oct-Dec net profit falls on quarter, rises on year
* Jupiter Wagons Oct-Dec consol PAT rises 19.5% YoY to INR 973.39 million
* JBM Auto Oct-Dec consol net profit rises 8.2% on year to INR 526.4 million
* Craftsman Automation Oct-Dec consol PAT falls over 82% YoY to INR 129.3 mln
* Earnings Review: Maruti Suzuki's double-digit PAT, sales growth misses view
* Maruti Suzuki reappoints Takeuchi MD, CEO for 3 yrs; OKs Gujarat arm merger
* Bajaj Auto says Africa operations improve with recovery in Nigerian sales
* Analyst Concall: Bajaj Auto to launch electric rickshaw under Bajaj Gogo
* Analyst Concall: See automotive aftermarket sales growing 8-10% FY26 - Bosch
* Earnings Review: Bosch Oct-Dec profit falls, sales growth slowest in FY25
* Earnings Review: Bajaj Auto's earnings growth slowdown continues in Oct-Dec
* Analyst Concall:TVS Motor sees FY25 local demand momentum continuing in FY26
* Hyundai Motor Oct-Dec consol PAT falls 18.6% YoY, sales down 1.3%
* Earnings Review: TVS Motor Oct-Dec PAT, sales growth lowest in 11 quarters
* Great Eastern Oct-Dec consol sales fall 0.7% YoY, PAT rises 10.3%
* SpiceJet to re-induct Boeing 737 MAX aircraft as part of fleet restoration
* India, China agree to resume direct air services
* SC asks Delhi NCR states to consider if govt, bodies should buy e-vehicles
* Earnings Outlook: Discounts, advt spends may hamper Maruti Suzuki's margins
* Eicher Motors' Royal Enfield Hunter 350 sales cross 500,000 units
* PRESS: Apple in talks with Bharat Forge to manufacture components in India
* IPO Alert: Shreeji Shipping Global files DRHP for fresh of 20 mln shares
* Analyst Concall: InterGlobe Aviation eyes 20% on-yr rise in capacity Jan-Mar
* Jupiter Wagons subsidiary partners with Porter to boost electric mobility
* Earnings Review: InterGlobe Avation's top line grows for 15th straight qtr
* Great Eastern Shipping to sell Supramax dry bulk carrier Jag Rishi
 

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Gopika Balasubramanium

Edited by Deepshikha Bhardwaj

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