More Stories

Informist, Friday, Oct. 10, 2025

MUMBAI – Automobile analysts reiterated their bullish stance on the sector as they expect sales growth to gather momentum in the coming months driven by pent-up demand, an increase in purchases by first-time buyers, demand from existing car owners seeking to upgrade, and purchases for Diwali across the country. However, they said the response from consumers during Diwali will paint a clearer picture of how festival demand has shaped up and of sales growth.

Automobile companies have passed on to customers the entire benefit of the goods and services tax cuts implemented in September. Some have rolled out additional discounts to drive sales. While the growth outlook in the domestic market seems rosy, the global market, especially the luxury segment, continues to grapple with soft demand.

Automobile companies and dealers are positive on strong domestic retail demand coming in, an analyst at a large broking firm said, adding that the demand is likely to be sustained beyond the festival season. The industry is now looking at structural growth in the medium term as well, the analyst added. The analyst said that in a valuation perspective, automobile stocks are yet to account for the growth that is coming in.

"Demand from first time-buyers, especially ones looking to upgrade from two-wheelers to cars with the discounts and GST cut benefits, has come in," Ravi Gupta, automobile analyst at InCred Capital, said. The overall demand scenario will be more certain once Diwali comes, he added.

However, the entry-level portfolio of two-wheelers, which comprises motorcycles with engine capacity below 125 cubic centimetres, may see a slowdown, analysts said. The norms making anti-lock braking systems compulsory for this class of two-wheelers are likely to increase input costs, nullifying the benefits of the GST cuts, they said. This may hit the sales of Hero MotoCorp the most as its portfolio has a large chunk of such motorcycles. 

While the Nifty 50 index rose 1.6% in the past five sessions, the Nifty Auto index declined marginally. Maruti Suzuki India, Bajaj Auto, and Eicher Motors were among the big gainers in the sector during the week.

On the global front, carmakers are grappling with low sales and have cut guidance due to softening demand as US tariffs hit consumer appetite. Tuesday, BMW slashed its margin forecasts for 2025 as the German premium automaker continues to face weak demand in China. Similarly, British automaker Aston Martin sees wholesale volumes in 2025 declining by a mid-to-high single digit. Mercedes-Benz, another premium automaker, said its overall car sales fell during the September quarter mainly because of challenges in the Chinese market and the hit to consumer sentiment in the US by President Donald Trump's automobile tariffs.

Consequently, the Tata Motors stock came under selling pressure through the week and ended in the list of worst-hit Nifty 50 constituents for most of the sessions. The company's British subsidiary Jaguar Land Rover's retail sales between July and September fell 17% to 85,495 cars. This was mainly due to the stoppage in production for several weeks due to the cyber attack in early September. Analysts said that while volumes were hit by the production disruption, the bigger problem was the soft demand for luxury cars across international markets, especially in China, as acknowledged by the company's peers. "This is accounted for in the price," an analyst at a global brokerage said. 

"...the near term outlook remains positive," said Bhavya Shah, technical analyst at StoxBox. Mahindra & Mahindra, Bharat Forge, and Bajaj Auto are the top picks in the sector with robust technicals viewed on charts, he added.

TOP HEADLINES

* Sona BLW inks pact with NEURA Robotics to develop advanced technologies
* M&M produces 99,758 automobile vehicles in September, up 24% on year
* M&M says no plans to demerge businesses, sees greater value in synergy
* Eicher JV VECV to produce Volvo automated manual transmission units in India
* Maruti Suzuki opens India's 5000th ARENA service facility in Coimbatore
* Escorts Kubota plans to invest up to INR 20 bln in Haryana plants by 2031
* Ola Electric Mobility arm OKs allotting 400 mln shares via private placement
* JLR Q2 despatches tumble 24% YoY impacted by cyberattack and US tariffs
* JLR plans phased restart of ops in UK, unveils financing plan for suppliers
* Hope auto cos' yr-end vehicle price hikes rational, mature: FADA's Giridhar
* Sept auto retail sales grow 5% YoY on GST cut, festive fervour - FADA data
* Tata Motors Jul-Sept production rises 9% on year to 235,904 units
* M&M launches top-end variants in Bolero, Bolero Neo range with more features
* TVS Motor launches new variant of Raider motorcycle starting at INR 93,800
* JLR car registrations slump 41% on year in Sept amid crippling cyberattack
* Govt certifies Ola Electric's rare earth magnet-free ferrite motor
* Force Motors Sept total sales rise 1.8% YoY to 2,610 units, domestic up 1.5%
* TVS Motor arm acquires 100% stake in Italian design co Engines Engineering
* Maruti Suzuki delivers cars by rail to Kashmir valley from Manesar plant
 

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

Reported by Gopika Balasubramanium

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.