Auto stocks rev up as December sales surge drives Nifty Auto to a 6-month high

Nifty Auto becomes top sectoral gainer on January 2

Auto stocks hit the fast lane on January 2, with heavyweights like Eicher Motors, Bajaj Auto, Hero MotoCorp, M&M, Maruti Suzuki, and Tata Motors roaring ahead by up to 7 percent. The rally fueled the Nifty Auto index to its biggest single-day gain in six months, turbocharged by better-than-expected sales figures.

Eicher Motors was also the top gainer on the Nifty, rallying 7 percent following an impressive 25 percent increase in December sales to 79,466 units year over year. Exports recorded a 90 percent surge from the year-ago period after the company exported over 11,000 units of Royal Enfield.

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Shares of Maruti Suzuki India Ltd (MSI) extended their gains for second straight day to rally 5 percent on January 2 on bullish management commentary on the strong car sales seen in December.

Partho Banerjee, Senior Executive Officer - Marketing & Sales, Maruti Suzuki India Limited told CNBC-TV18 that dealer network stock is for just nine days and that the auto major has over 2 lakh pending bookings. Maruti Suzuki India Ltd on January 1 reported a 30 percent rise in total wholesales at 1,78,248 units in December 2024 as compared to 1,37,551 units in the same month a year ago.

Also read: Attractive valuations, stronger earnings could see large-caps lead charge in 2025, says Canara Robeco MF

Automaker Mahindra & Mahindra extended gains for a second session in a row after it clocked an 18 percent jump in sport utility vehicle sales to dealers in December at 41,424 units due to strong demand. It reported sales of 35,174 units in the year-ago period. Mahindra, India's second-biggest SUV maker by market share, has remained resilient amid a broader slowdown in car sales that pressed manufacturers and dealers into offering hefty discounts.

As a result, Citi maintained its 'buy' call citing strong volume momentum throughout 2024. The growth in domestic UV volumes highlights the success of new model launches, while tractor sales have also remained robust, with domestic volumes surging 22 percent year-on-year. Citi believes that another good harvest season could act as a further catalyst, potentially providing a boost to tractor volumes.

Shares of Tata Motors jumped as much as 2 percent to their day’s high of Rs 765 on the BSE as the company reported a 1 percent year-on-year growth in its December 2024 sales numbers at 76,599 units versus 76,138 units in the year-ago period.

Read more: Sensex surges 1,000 pts, Nifty reclaims 24k as auto, IT stocks bolster bullish sentiment; PSU banks suffer

Hyundai Motor India shares rallied over 2 percent after it unveiled the highly anticipated Hyundai CRETA Electric."This groundbreaking electric SUV combines bold design, cutting-edge technology, and unparalleled safety to set new benchmarks in India’s EV market. Designed to lead, the Hyundai CRETA Electric promises to redefine the market with its electrifying performance, futuristic design, and user-centric innovations," said Hyundai in a stock exchange filing.

At about 1 pm, Nifty Auto was trading at 23,797, higher by 2.8 percent from the last close.

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