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Informist, Friday, Jun. 6, 2025

MUMBAI – Shares of companies selling entry-level two-wheelers and four-wheelers are likely to rise next week on hopes that the surprise rate cut of 50 basis points by the Reserve Bank of India will aid sales growth. Cheaper availability of loans is likely to help several automobile companies recover from a slump, analysts said. However, some companies face risk due to a shortage of rare-earth magnets.

"Automobiles will be directly impacted...anything and everything to do with domestic individual, household consumption (is expected) to do better," Dharmesh Kant, head of equity research at Cholamandalam Securities, said. Sales of entry-level vehicles have been slow due to affordability concerns after prices rose significantly over the years. Maruti Suzuki Chairman R.C. Bhargava, in an interview with Business Standard newspaper earlier this week, acknowledged that affordability is an issue and only lower duties can revive sales of small cars.

The automobile industry is in need of support, which was visible in the recent retail sales numbers from the Federation of Automobile Dealers Associations. On Friday, FADA reported that two-wheelers are seeing strong demand from semi-urban and urban areas, but demand for passenger vehicles is weak. "Entry-level models were hardest hit as constrained financing and subdued consumer sentiment compounded the slowdown," FADA said on the passenger vehicle segment.   

Electric vehicle makers are likely to face the most impact from shortages in rare-earth magnets, which are used in these vehicles' motors, Emkay Global Financial Services said in a report. "For E-2Ws (electric two-wheelers), magnets used in motors cost INR 15, whereas in PVs (passenger vehicles), the cost ranges from Rs 2K-24K (INR 2,000-24,000) depending on a variety of features. The issue is not cost but availability and sourcing alternatives," the brokerage said.

TOP HEADLINES

* India May vehicle retail sales rise 5%, led by 2-, 3-wheelers, says FADA
* M&M total May vehicle sales volume 80,458, dn 0.4% on month, up 17% on year
* Tata Motors JLR's May sales in UK fall nearly 24% on year to 4,643 units
* TVS Motor promotes MD Sudarshan Venu as chairman effective Aug 25
* Garden Reach in pact with German co to construct 4 multipurpose vessels
* Bajaj Auto arm issues call notice for 26,000 shares of Pierer Industrie
* Tesla edges closer to India launch, leases space in Mumbai for svc centre
* Escorts Kubota launches backhoe loader 'BLX 75' for domestic market
* NCLAT allows BluSmart, Gensol Electric to move NCLT against bk acct freezing
* Praj Ind, IATA, ISMA in pact to drive adoption of sustainable aviation fuel
* Maruti Suzuki expands solar power capacity at Kharkhoda, Manesar units
* Ashok Leyland arm raises stake in UK's Switch Mobility to 99.57% from 98.56%
* Ashok Leyland gets INR-1.84-bln order from Tamil Nadu govt for 543 buses
* Ola Electric promoters Hyundai Motor, Kia Corp sell some stake; Citi buys 2%
* BluSmart Fleet, Gensol Electric move NCLAT against freezing of bank accounts
* Ashok Leyland to use INR-5 bln-Optare investment to repay loans, incur capex
* Tata Motors Harrier EV priced at INR 2.15 mln with lifetime battery warranty
* IATA to work with ISMA, Praj Ind in push for sustainable aviation fuel
* TCS, Virgin Atlantic extend tie-up to boost airline's digital transformation
* TVS Motor inks MoU with Kadam Mobility to deploy electric 3-wheelers in FY26
* NCLT issues notices to BluSmart Mobility, Gensol Engg on insolvency pleas
* Maruti Suzuki's May total production rises 1.4% on year to 195,882 units
* India discusses co-developing ports with Japan, seeks greenfield investment
* Govt notifies EV policy, but Tesla opts against manufacturing cars in India
* Maruti Suzuki flags falling auto demand, says May sales grew on new launches
* Exports offset domestic dullness for Bajaj Auto in May, despatches up 8% YoY
* Ashok Leyland total sales up 5.5% in May, light commercial vehicles lag
* Maruti Suzuki May passenger vehicle despatches fall 6% YoY, exports rise 80%
* Hyundai Motor India's domestic sales fall 11% on year, exports up 3% in May
* Scooter sales boost Hero MotoCorp's May despatches, exports remain subdued
* Telangana transport agency withdraws 40-bus order from Olectra Greentech arm
* IndiGo signs MoU with Airbus for 30 more wide-body A350-900 aircraft
* Eicher Motors' Royal Enfield sales in May up 26% on year at 89,429 units
* Drop in domestic sales volumes hits Escorts Kubota overall growth in May
* TVS Motor May volumes rise 17% YoY; motorcycle sales growth best in 8 mos
* M&M May domestic passenger vehicle volumes highest in 7 months, above view
* Tata Motors India despatches fail to grow YoY for 5th straight month in May
* Eicher Motors CV sales volume growth in May slowest in 5 months, below view
* Ashok Leyland bags order from Patanjali Parivahan to deliver 250 trucks

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 Anshul Choudhary

Edited by Tanima Banerjee

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