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Informist, Friday, Mar. 21, 2025

MUMBAI – Shares of automobile companies are expected to be under pressure next week as the overall demand for automobiles is slowing down and a recovery is unlikely anytime soon, analysts said. This week, many Indian automobile companies, including Maruti Suzuki and Tata Motors, announced they will hike vehicle prices by up to 4% from April.

Analysts said the price hikes are likely to delay the recovery of volume growth, which has been under constraint in January and February. Automakers have to comply with regulatory changes, such as the onboard diagnostics phase two, which will take effect in April, analysts said. The onboard diagnostics phase two mandates a built-in diagnostic system in vehicles for real-time testing and monitoring of engine systems. Automakers also have to make manufacturing changes in the vehicles to comply with the norms, which will translate to higher input costs, analysts said, adding the only way for these companies to pass on the costs is by raising prices.

Volumes are likely to shrink more as a result of higher prices of vehicles, analysts said. However, a research analyst at a domestic brokerage said automakers might tackle this by premiumisation and new launches.

Demand is unlikely to pick up soon because consumers have put their discretionary spending on halt, another analyst tracking the sector said. Even though valuations of Indian automakers are 'decent' at the moment, these will likely decline as it is not supported by healthy volume growth, the analyst said.

That said, analysts named Mahindra & Mahindra as the outperformer in the industry, as the company has been showing good performance in all segments-—tractors, passenger vehicles, and commercial vehicles. They said the entry of Tesla may not pose much threat to the company as the domestic industry is 'hard to crack' and customers prefer incumbents.    

This week, the Nifty Auto index gained 5.9% to close at 21756 points on Friday. All stocks in this index closed higher this week, with Bharat Forge being the top gainer. Others such as Samvardhana Motherson, Exide Industries, Bajaj Auto, TVS Motor Co., Tata Motors, and Ashok Leyland gained over 7% during the week. 

TOP HEADLINES

* Hero MotoCorp confirms resignation of Chief Information Officer Reema Jain
* Hero MotoCorp to invest up to INR 5.25 bln in Euler Motors
* CIE Automotive terminates pact with Ijya Renewables to subscribe to equity
* TVS Motor to pay INR 10 per share interim dividend, record date Mar 26
* No relation with reports on Hero Motors-German co JV, says Hero MotoCorp
* Ashok Leyland inaugurates bus manufacturing unit in Andhra
* CCI seeks public comments on Bharat Forge's proposed buy of AAM India Mfg
* Hyundai Motor hikes prices by up to 3% from April due to rising input costs
* IndiGo's pending aircraft delivery count swells to 925
* CNBC-TV18: Hero MotoCorp HR head resigns; 4 other senior officers also exit
* BPCL to develop first hydrogen-fuelled aircraft ecosystem
* PRESS: Ola Electric may lose out on subsidy due to delay in EV registration
* Bajaj Auto to invest up to INR 15 bln in Bajaj Auto Credit via equity, debt
* Bajaj Auto board approves re-appointment of Rajivnayan Bajaj as MD, CEO
* Tata Motors to increase prices across passenger vehicles effective April
* M&M to acquire 57% stake in Mauritius-based co from its arm for $14.29 mln
* PRESS: Three proxy firms oppose Venu Srinivasan's reappointment at TVS Motor
* SC notice to Pegasus Holdings on SEBI plea in Federal-Mogul open offer case
* Maruti Suzuki to hike car prices by up to 4% from April
* Tata Motors to hike prices of commercial vehicles by up to 2% from April 1
* SpiceJet promoter group to infuse INR 2.94 bln by converting 131 mln warrants
* Qualcomm Ventures joins KPIT Tech JV as shareholder, to invest 10 mln euros
* M&M arm Fifth Gear Ventures amalgamates with Mahindra First Choice Wheels
 

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

US$1 = INR 85.97 

Reported by Gopika Balasubramanium

Edited by Saji George Titus

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