Auto stocks rallied on Monday, led by heavy gains in shares of Mahindra & Mahindra (M&M), Maruti Suzuki India, TVS Motors, Eicher Motors and others after the companies reported their wholesales data for the month of February 2025. Auto stocks rally lifted the Nifty Auto index by over 1%, making it among the top sectoral index gainers.
India’s largest passenger vehicle maker Maruti Suzuki reported marginal growth while Hyundai Motor India and Tata Motors posted a decline in their sales in February as a slowdown in the market continued with demand remaining muted.
Maruti Suzuki share price gained less than a percent, while Tata Motors shares declined more than 1% and Hyundai Motor India stock plunged nearly 3% on March 3. However, commercial vehicles maker Ashok Leyland shares jumped nearly 3% after the company reported decent growth in sales. Eicher Motors stock price also added nearly 3% and M&M shares rallied over 4%.
In the two-wheeler segment, TVS Motor Company share price jumped more than 4%, Bajaj Auto shares gained 1%, while Hero MotoCorp shares witnessed a loss of 1%.
Auto Stocks to buy after Feb sales data
Volume momentum slowed across categories in February 2025 after the strong festive growth, with a two-wheeler decline lower than that for PVs and CVs.
“TVS Motor Company and Eicher Motors continue to gain market share with strong product actions and pricing discipline, while exports revive as macro challenges ease. Valuations for both remain reasonable post-correction,” Chirag Jain, Senior Research Analyst at Emkay Global Financial Services Ltd.
In PVs, he believes Maruti Suzuki is best placed with two ICE SUV launches, followed by Hyundai Motor India, while other OEM launches are largely EV (Electric Vehicle) focused.
“M&M faces headwinds with its ICE-SUV cycle behind, peak tractor share, and muted E-SUV bookings. Escorts Kubota may benefit from a tractor upcycle after consolidation and component exports to Kubota,” Jain said.
Top stock picks in the auto sector by Emkay Global includes TVS Motor Company and Eicher Motors in two-wheelers; Maruti Suzuki India in PVs and Escorts in Tractors.
Brokerage firm Motilal Oswal Financial Services (MOFS) also noted that the demand across segments remains weak, except for tractors, where it expects dispatches to remain positive in the near term, driven by positive farm sentiment.
Maruti Suzuki is MOFSL’s top pick among auto OEMs, as the brokerage believes the company’s upcoming new launches are expected to continue to help improve the mix and drive healthy earnings growth.
MOFSL said it also likes M&M given the upcycle in tractors and healthy growth in UVs. Among ancillaries, it prefers Samvardhana Motherson International, Endurance Technologies, and Happy Forgings.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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