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Informist, Friday, Jul. 3, 2026

MUMBAI – While the monthly wholesale volume for automobile makers for June came in broadly in line with expectations, analysts are concerned about the progress of south-west monsoon in the coming weeks, alongside rising raw material costs and risks of El Nio in the near term. In the coming months, volumes may be hit as monsoon is a seasonally weak period for the automobile industry. In the near term, price hikes announced by companies, alongside the trend in fuel prices, will be closely tracked, as these factors are a little sensitive to demand, analysts said.

For the next week, the Nifty Auto index is expected to find support at 25900-26350 points and face resistance at 27700-28080 points, said Ashish Sherigar, senior technical analyst at NVS Brokerage. The auto index is expected to be range bound in the coming sessions, he added.

For the week, shares of nine companies that are part of the 15-stock Nifty Auto index closed lower. Exide Industries, Sona BLW Precision Forgings, and Maruti Suzuki India gained 5-7% and were the biggest gainers. Samvardhana Motherson International, Eicher Motors, and Tata Motors Passenger Vehicles were the underperformers. The Nifty Auto Friday closed at 26988.10 points, down 120.10 points or 0.4% from Thursday.

June wholesale sales of a few two-wheeler makers and commercial vehicle manufacturers slightly exceeded expectations, a senior analyst at a large-sized broking firm said. Given there are lingering risks of El Nino, the pattern of monsoon will be closely watched, the analyst said. The current crop cycle will not be affected as there are optimum reservoir levels. However, if the monsoon does not progress well, the upcoming crops will definitely be hit, he added.

The El Nino conditions will primarily impact the tractor industry and slow down volumes in the coming months. "There has been a significant upcycle for the tractor industry in the last 3–4 years, and we need catalysts to see growth ahead," the analyst quoted above said. There will definitely be a second order impact for other segments, especially sentiment for rural markets, he added. That said, the analyst also emphasised that in rural areas, people are trying to diversify their income and hence an adverse impact due to El Nino may be ruled out.

However, two-wheeler companies and passenger vehicle sales could be hit, they added. Especially for Hero MotoCorp, since their portfolio mainly caters to users who prefer bikes less than 125 cubic centimetres. That said, for two-wheelers, the premiumisation theme continues to outpace the mass market in terms of pace of growth. This trend is very likely to continue, two analysts said. For Hero MotoCorp, electric vehicles sold under VIDA are gaining significant momentum in terms of sales that are expected to continue, analysts said.

If automobile companies implement price hikes for their products in the near term to offset commodity prices, there could be an impact on sentiment, analysts said. These hikes fully do away with the benefit of the reduction in goods and services tax last year and people who may want to buy a premium offering would go for cheaper models due to price constraints, the analyst quoted above said. Most automobile companies have taken price hikes of up to 7% since January.

Eicher Motors has said it will raise prices for commercial vehicles sold under the Volvo brand in July. Tata Motors may also hike prices in July, since it only took one round of increases in January, analysts said. "I think two-wheeler and passenger vehicle companies are done and dusted with price hikes, don't think we can expect more from them soon," Ravi Gupta, research analyst tracking automobile sector with InCred Capital, said. "Dealers are confident about growth. Even in June, retail sales of two-wheelers and passenger vehicles were 30% faster than about 20% in wholesale," he added.

While there are concerns about the growth outlook for the second half of financial year 2026-27 (Apr-Mar), especially whether the momentum will continue or not due to high base and the rise in fuel and commodity costs, Gupta expects the sales of automobiles to accelerate during the coming quarters. He said commodity prices were elevated in the first quarter, but have started to stabilise from June. The impact of this can be felt in the June quarter but the prices should stabilise from July, he added. "Sentiment-wise, even fuel prices are expected to come down," Gupta said. However, tractor sales are expected to fall, mirroring historical trends, he said.

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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:

End

Reported by Gopika Balasubramanium

Edited by Shubhayan Bhattacharya

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