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Informist, Friday, Apr. 25, 2025

MUMBAI – Automobile stocks are likely to move next week depending on the earnings of automobile and auto-ancillary companies during the week. They may take cues from comments from the management of Maruti Suzuki India Ltd., the first from this industry to report March quarter earnings. Developments over the weekend on India-Pakistan tensions may also play a key role in investors' decisions, in addition to the ongoing US-China trade war, analysts said.

Tensions between India and Pakistan have increased following the terrorist attack in Pahalgam in Kashmir on Tuesday, which claimed at least 26 lives and left many injured.

Friday, the Nifty Auto closed 1.7% lower at 21994.50 points. The index rose nearly 3% this week and over 3% so far in April. In comparison, the Nifty 50 and the BSE Sensex have risen less than 1% this week. Mahindra & Mahindra was the top gainer during the week, while Eicher Motors was the worst performer. Nifty Auto is expected to find support at 21400 points and face resistance at 22400 points, Jatin Gedia, technical analyst at Mirrae Asset Sharekhan, said.  

The Street was left disappointed Friday as Maruti Suzuki's top line and bottom line both missed estimates. Maruti Suzuki's net profit for the quarter fell over 4% on year to INR 37.1 billion, while its revenue from operations grew 6% on year to INR 406.7 billion. Its total expenses for the quarter rose 9% on year due to a double-digit increase in cost of materials consumed, other expenses, and employee benefits. Following the results, shares of the company fell over 2% but came off lows towards the end of trading hours to close 1.7% lower at INR 11,698.

Regulatory compliance costs have increased the prices of small cars and the recently announced income tax exemptions in the Budget may not be enough to boost their sales, R.C. Bhargava, chairman of Maruti Suzuki, told reporters after results were announced.

Contrary to analyst expectations, Bhargava is not hopeful of small car sales getting a fillip from the income tax sops in the Budget. Bhargava does not expect FY26 to be much better than FY25, but expects to do better than industry expectations of a 1-2% on-year sales growth. Given the soft demand for automobiles in India, the company is in no rush to ramp up production anytime soon.

Analysts were expecting the March quarter results to be rather weak, considering the slowdown in sales owing to a moderation in demand and an increase in expenses. Most original equipment manufacturers undertook price hikes to offset the rising input costs to alleviate pressure on margins. Even then, analysts expect the margins of these companies to remain under pressure largely due to fading operating leverage, high competitive intensity, and escalating input costs.

TVS Motor Co Ltd. and Exide Industries will report their March quarter earnings in the coming week. Robust volume growth and a better mix of models, coupled with price hikes, are likely to drive earnings for TVS Motor. The Chennai-based two-wheeler maker is expected to report a 52% on-year increase in net profit to INR 7.4 billion and a 14% increase in revenue to INR 93.5 billion. On the other hand, battery-maker Exide Industries is expected to post an over 6% on year decline in net profit at INR 2.66 billion and a 2.6% on year rise in revenues at INR 41.13 billion.

TOP HEADLINES

* Earnings Outlook: Volume growth to drive TVS Motor's Jan-Mar PAT
* Japanese cos to buy Minda Corp's 7.5% stake in JV Furukawa Minda Electric
* Jupiter Wagons says Jabalpur unit ops paused because of labour unrest
* Tesla CFO says India a hard market to enter, tariffs creating anxiety
* Govt asks airlines to maintain regular fare levels after Pahalgam attack
* IPO Alert: Ather Energy initial public offer to open Mon, close Apr 30
* Hyundai Motor India, IOC ink MoU for mass use of hydrogen fuel cell vehicles
* CCI approves Bharat Forge's acquisition of AAM India Manufacturing
* Earnings Outlook: Better volume, realisations to drive Maruti Suzuki revenue
* Jupiter Wagons ops of one unit at Jabalpur facility shut since 15-20 days
* Tata Power arm, Tata Motors to develop 131-MW renewable energy project
* Eicher Motors launches Royal Enfield Classic 350 in Nepal
 

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 Saji George Titus

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