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Informist, Friday, Jul. 4, 2025

MUMBAI – Automobile stocks are expected to be under pressure in the near term as analysts are still unsure if a trade deal with the US will materialise within the Jul. 9 deadline. Weak sales, lack of demand, supply chain issues, and tariff-related overhang are likely to put some pressure on most auto companies. For the next week, the Nifty Auto is likely to move in a range of 23700-24200. On Friday, the index closed slightly lower at 23980.40 points.

The biggest talking point in the sector this week was auto wholesale data, which had started coming in during the middle of the week. Behemoths of the passenger vehicle industry such as Tata Motors, Hyundai Motor India, JSW MG Motors, and Kia all reported an on-year fall in wholesale sales for June amid subdued demand.

While geopolitical uncertainties currently cloud the already low 1-2% growth forecast for the passenger vehicle industry, analysts are optimistic that a turnaround is still possible in the ongoing financial year on the back of new launches, slowing inflation, and income tax cuts taking effect. Nomura Global Markets Research expects passenger vehicle industry to grow 5% on year in the ongoing financial year, but said that meaningful recovery will only be seen from the second half.

Mahindra & Mahindra was the only automaker to report an on-year growth in wholesale sales during the month, with its total vehicle sales rising 14% on year to 78,969 units. However, the company sold fewer passenger vehicles than it did in April and May. Its utility vehicle sales grew 18% on year during the month, lower than Nomura's expectations of a 20% growth.

The two-wheeler industry showed a positive sales growth, with exports surging during the month. "In Jun'25, 2W OEMs reported an overall growth (domestic + exports) of 11% YoY, broadly in line with our estimates," JM Financial said in a report. Wholesale sales of commercial vehicles declined 3% on month, but analysts believe that the segment will recover soon. "Going ahead, we expect underlying demand environment to improve led by strength in underlying economy, continued focus of GOI on infrastructure development and steady fleet operators profitability," JM Financial said regarding the segment.

Hero MotoCorp is expected to be under pressure as reports said it was one of the stocks which is likely to be excluded from the Nifty 50 in the next index review. Nuvama expects the stock to fall when the adjustment period comes closer, but does not see any effect till then. The index review announcement is expected in August.

Shares of Gabriel India surged over 42% during the week after the company Monday announced a strategic restructuring of its business, wherein it will merge its subsidiary Anchemco India Pvt. Ltd. into another arm Asia Investments Pvt. Ltd. Furthermore, post the merger, the company said it will demerge the automotive business of Asia Investments and merge it into Gabriel India, the parent company. Anchemco is engaged in manufacturing of brake fluids, radiator coolants, and diesel exhaust fluid and is a major supplier to auto majors such as Tata Motors, Ashok Leyland, VE Commercial Vehicles, Mahindra Trucks and Buses, and Daimler.

Post the announcement, Elara Securities has raised its target price of Gabriel India to INR 1,115 from INR 666 as it said the auto ancillary company is transitioning into a multi-product company. "In our view, the greatest potential for re-rating for any auto ancillary company arises from transition from a single- to a multi-product portfolio," the brokerage said.

TOP HEADLINES

* M&M to start deliveries of BE 6, XEV 9e Pack Two electric cars by end Jul
* From 2030, world ethanol demand seen slowing dn on shift to EVs: S&P Global
* No tax on incentives to Bajaj Auto, RIL under Maharashtra schemes, says HC
* Delhi govt urges air quality panel to halt fuel norm on end-of-life vehicles
* Uno Minda acquires e-drive business assets from Germany-based group cos
* NCLT rejects Amtek group Dham's repayment plan in personal insolvency case
* Motherson Sumi Wiring names Gulshan as chief financial officer
* Bharat Forge completes acquisition of AAM India Manufacturing
* HC notice to Delhi govt, air quality body on fine against petrol pump owners
* L&T Tech in multi-year pact with Traton for engineering mobility solutions
* Hero MotoCorp sales rise 10% on year in Jun, but fall 10% YoY in Apr-Jun
* FOCUS: Car sales show no sign of recovery; rare earth magnets add to worries
* Hero MotoCorp introduces two variants of electric 2-wheeler VIDA VX2
* Hyundai Motor Jun exports up 13% YoY, domestic despatches contract 6%
* Maruti Suzuki Jun PV despatches hit 18-mo low, exports likely at record high
* Tata Motors India PV Jun despatches dn 10% YoY, e-vehicle sales bright spot
* Ashok Leyland's CV despatches grow 3% YoY in June, India sales fall 1%
* Eicher Motors' India June CV despatches fall 2.5% YoY, exports up 13%
* TVS Motor's June two-wheeler despatches grow fastest in 9 months at 20%
* Eicher Motors' Royal Enfield sales in June rise 22% YoY to 89,540 units
* M&M's India June PV despatches up 18% YoY, tractor sales rise 13%
* Exports, monsoons help Escorts Kubota clock minor rise in June tractor sales
* Bajaj Auto's India Jun 2-wheeler despatches dn 16% YoY, exports at 3-mo high
* Bharat Forge to transfer defence business to subsidiary for up to INR 5 bln
* IPO Alert: Tenneco Clean Air files DRHP with SEBI for INR-30-bln OFS
* ZF Commercial MD Kaniappan completes term, ceases to be director
* Tractor, 2-wheeler despatches likely grew in June, low demand a drag for PVs
* TVS Motor launches new variant of Apache RTR 160 motorcycle at INR 134,320

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 Akash Mandal

Edited by Akul Nishant Akhoury

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