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Informist, Friday, Jul. 18, 2025

NEW DELHI/MUMBAI - Shares of automobile companies are expected to continue consolidating, as they have done in the last two months, amid a negative outlook for the sector in the short term, analysts said. The Nifty Auto is expected to consolidate next week and move in a range of 23370-24170 points, according to Nandish Shah of HDFC Securities.

Friday, Nifty Auto closed 0.5% lower at 23894.35 points. This week, the sectoral index outperformed the benchmark indices, rising 1.7% compared with a 0.7% decline in the Nifty 50. Bosch, Hero MotoCorp, Mahindra & Mahindra and Bajaj Auto were among the top gainers on the Nifty Auto this week, while Maruti Suzuki and Ashok Leyland were the top losers.

The direction of share prices will also be dictated by earnings for the June quarter, analysts said. "The short-term view is negative. The sector is facing problems related to consumption and supply chain because of rare earth magnets," said an analyst at a Mumbai-based brokerage firm.

Despite the government announcing income tax breaks and the Reserve Bank of India cutting repo rate by 100 basis points since February, automobile sales have remained subdued. "Despite these moves, the Indian middle-class is reluctant to spend," the analyst said, adding that he does not expect the automobile sales to pick up any time soon.

The analyst also said the valuations of automobile companies are expensive, which cannot be justified at present, given the lack of visibility on earnings growth. "If the rare earth magnets issue is not resolved, it will impact production," the analyst said. 

A government source told Informist on Friday that the original equipment manufacturers are already exploring alternatives to address the shortage. China currently dominates the global supply of rare earth magnets. On Tuesday, Commerce Secretary Sunil Barthwal said India's free trade agreements with Chile and Peru will help reduce its reliance on China for rare earth minerals, which are crucial for the automotive sector. Peru and Chile have significant geological potential for critical minerals, including copper and lithium.

TOP HEADLINES

* Auto cos working on plan to mitigate rare earths' shortage, says govt source
* Bajaj Auto arm ups NCD issue cap to INR 50 bln, CP issue cap to INR 30 bln
* Crisil raises outlook on InterGlobe Aviation's bank facilities to positive
* Sales of Tata Motors' Punch hit 600,000-mark less than 4 years since launch
* TVS Motor launches refreshed Apache RTR 310, prices start at INR 239,990
* Maruti Suzuki to hike Ertiga, Baleno prices on airbag addition
* PRESS: China imposes fresh curbs on import of EV battery mfg technology
* Air India to partially restore flight ops after post-crash 'safety' pause
* Bombay HC upholds govt plan to build passenger jetty near Gateway of India
* Jupiter Wagons' CFO Sanjiv Keshri resigns for personal reasons
* Data Alert: PV despatches fell 7.4% YoY in Jun, 1.4% in Apr-Jun, says SIAM
* Auto cos looking at alternatives to China for magnets, says SIAM president
* Tesla enters India with Model Y launch, on-road price starts INR 6.11 mln
* Ashok Leyland, Tamil Nadu Grama Bank in pact for vehicle finance partnership
* SC rejects customs dept's plea on retrospective IGST on reimport of aircraft
* Analyst Concall: EV industry entering consolidation phase, says Ola Electric
* M&M says not in talks with Uno Minda for rare earth production
* Earnings Review:Ola Electric posts best-ever consol gross margin; loss widens
* Engine fuel supply was cut just before Air India flight crashed, report says
* M&M board approves subscribing to rights issue by arm Mahindra Logistics
* Govt extends support for electric trucks under PM E-Drive scheme
* Earnings Outlook:Weak Apr-Jun for transport sector; auto, airline cos to lag
* Olectra Greentech buys additional shrs in Evey Trans (Mah) for INR 179.4 mln

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 Anand JC and Gopika Balasubramanium

Edited by Saji George Titus

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