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Informist, Friday, Mar. 28, 2025

MUMBAI – Shares of automobile and auto ancillary companies will likely be under selling pressure next week as the 25% tariffs announced by US President Donald Trump on imports of cars and car parts will take effect. Analysts said that domestic original equipment manufacturers are unlikely to see a significant impact from the new duties levied by the US, however, Tata Motors' subsidiary Jaguar Land Rover will bear the brunt, along with some ancillary companies. Investors will also look at the monthly retail sales data due next week.

Samvardhana Motherson International and Sona BLW Precision Forgings are likely at risk, a research analyst said. However, these companies are confident about passing on the higher cost to the buyers and will likely diversify their presence to other geographies to reduce dependence on the US, the analyst said.

Seperately, Samvardhana Motherson Thursday said the tariffs announced by the US may not have a material impact on its financials as a significant part of the company's products sold in the US are either manufactured in the US or comply with US-Mexico-Canada agreement.

Automobile wholesale sale numbers for March would likely have witnessed a slowdown across segments, except tractors, Nomura Equity Research said in a report. However, domestic passenger vehicle companies will likely see some improvement towards the end of the month on the back of pre-buying due to price hike announcements and the Navratri festival, which begins on Mar. 30, earlier than from Apr. 9 in 2024, Nomura said. 

Both passenger vehicles and two-wheelers will likely post flat on-year growth in their volumes in March, whereas sales volume of medium and heavy commercial vehicles are expected to fall 3% on year, the brokerage said. Tractor wholesale volumes, on the other hand, are likely to buck the trend as they are expected to post a 24% on-year growth in sales on the back of positive rural demand amid improved crop prices and good reservoir levels.

This week, the Nifty Auto index fell 2% to close at 21295.50 points on Friday. Only seven stocks in this index closed higher this week, with Bosch gaining the most. Mahindra & Mahindra and Tata Motors were the biggest laggards this week. 

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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 Tanima Banerjee

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