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Informist, Friday, Sept. 26, 2025

MUMBAI – Analysts continue to be bullish on the automobile sector as they believe the surge in enquiries, footfalls in showrooms, and bookings will translate into sales. In the case of small cars, however, it is yet to be seen whether the surge in demand is only due to the noise on changes in goods and services tax or it has improved "structurally". Though automotive stocks have run up substantially with some of them at record highs, analysts believe they can still attract investors.

Friday, the Nifty Auto closed at 26484.55 points, down 273.95 points or 1%. Earlier this week, the sectoral index had touched its historic high at 27725.75 points. However, it fell thereafter as investors took profits amid a weak market plagued by the falling rupee, persistent selling by foreign investors, and US trade policies. Sectoral analysts believe the fall in automobile stocks was due to the sell-off in the broader market, where other factors were at play, and the fundamentals of the sector remain strong. Some said a week is too short a period to decide the sector's movement.

Monday, the GST tax cut came into effect. There were several reports of increased bookings on the first day with pent-up demand being unlocked and on higher discounts from automobile companies. "For small cars, the tax cut has led to increased demand, especially in rural markets," an analyst at a domestic brokerage said. "However, urban markets are yet to pick up."

Maruti Suzuki India has been very vocal on its sales this week. In the latest available update, the company's spokesperson said Thursday that retail sales for the week had touched 75,000 units and were expected to cross 80,000 by the end of the day. However, the analyst quoted earlier said, "I don't think structurally demand has picked up for Maruti's small cars, for their entry-level portfolio does not have aspirational products." Affordability is not an issue for buyers now and they are looking to upgrade, the analyst said.

Another analyst tracking the sector at a domestic brokerage said on condition of anonymity that if Maruti Suzuki is giving discounts even after the GST cut, it is a sign that demand for small cars is structurally absent. He also said the company's stock has already priced in all the positives with respect to a GST cut-induced sales growth. That said, Maruti's new launch, Victoris, also has not got a warm reception, the analyst said.

Asked about the festival season that is currently underway, analysts were positive that sales momentum will be upbeat between Navratri and Diwali. "From festival to festival, two-wheeler sales are expected to grow 20%," the second analyst said. "Passenger vehicles, in my view, will grow 13-15%." Among two-wheelers, the analyst prefers Hero MotoCorp and Eicher Motors. The analyst sees the Royal Enfield maker's shares rising up to INR 9,000 in the near term. Friday, the stock closed 0.9% higher at INR 7,047.

TOP HEADLINES

* Tata Motors arm JLR partially resumes operations post cyber attack
* Small cars get special mention in updated fuel efficiency norms draft
* Bureau of Energy Efficiency publishes updated draft fuel-efficiency norms
* Post GST rejig, Maruti Suzuki retail sales seen above 80,000 units in 4 days
* Equity Futures: Tata Motors likely to fall further in near term on JLR woes
* TVS Motor to buy Italian co to create innovation hub for international mkts
* PRESS: Tata Motors' JLR to bear losses from cyberattack on lack of insurance
* Olectra Greentech appoints Mahesh Babu Subramanian as MD from Saturday
* Reuters:Tata Motors JLR extends factory closure till Oct 1 after cyberattack
* Minda Corp eyes INR-175-bln revenue by FY30, to incur INR 20 bln on capex
* SIAM president says GST cut led to record deliveries across most segments
* Ashok Leyland to add 50 new service workshops in central India
* Uno Minda cuts prices of auto parts to fully pass on new GST rates
* Switch Mobility former CEO Babu to join Olectra Greentech as MD, says source
* Ola Electric announces 9-day sale for its 2-wheelers till Oct 1
* Hero MotoCorp launches Destini 110 scooter; prices start at INR 72,000
* PRESS:Auto enquiries jump on day 1 of GST cut; confusion among Kirana stores
* JBM Auto to launch EV buses in UAE market, in pact with Al Habtoor Motors
* GST Rejig: Festive surge in auto sales, turnaround for PV segment expected
* Great Eastern Shipping takes delivery of new vessel Jag Amol, expands fleet
* Bajaj Auto offers more benefits to buyers as new GST regime takes effect
* Nuvama ups price aim of several auto cos; cuts Eicher Motors, Bajaj Auto rtg
* Shipping Corp. of India signs MoUs with BPCL, HPCL, IOC
* Garden Reach Shipbuilders signs MoUs with five port authorities
* PV volumes to grow 20% Oct-Dec, in high single-digit FY26, says Emkay Global
* HSBC sees double-digit YoY PV sales growth in festive season due to GST cut
* Royal Enfield 350cc motorcycle range to be available on Flipkart from Mon
 

Following are the resistance and support levels for the stocks for next week as per calculations based on their prices on the National Stock Exchange:

End

Reported by Gopika Balasubramanium

Edited by Rajeev Pai

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