Nifty Auto eases after 2-day rally as investors book profits on strong September sales

Profit-booking pulls auto shares down up to 2 percent

Auto stocks faced profit-booking on October 3 after recent gains. Shares of TVS Motor, Mahindra & Mahindra (M&M), Bajaj Auto, Hero MotoCorp, Maruti Suzuki, Eicher Motors, and Ashok Leyland slipped up to 2 percent even as September sales data reflected strong demand following GST rate cuts and the onset of the festive season.

The Nifty Auto index lost steam after a two-day run, with 10 of its 15 stocks in the red.

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Maruti Suzuki, India’s largest carmaker, reported a 9.1 percent rise in domestic wholesales to 1.4 lakh units. Its bookings crossed 3.5 lakh in September, up 35 percent from last year, while retail sales rose 27.5 percent year-on-year to 1.7 lakh units. Tata Motors climbed to second place in the domestic passenger vehicle market, overtaking M&M and Hyundai.

Hyundai sold around 70,000 units, growing 10 percent from last year, mainly driven by a sharp 44 percent jump in exports, though domestic volumes stayed flat. M&M’s utility vehicle sales rose 10 percent to 56,000 units, though wholesales were partly impacted by logistics issues. Retail sales for M&M, however, surged 60 percent year-on-year in the first nine days of the festive season.

In the two-wheeler space, September sales were mixed but overall posted 11 percent growth. Bajaj Auto’s sales rose 9 percent to 5.1 lakh units, while TVS Motor maintained momentum with a 12 percent rise to 5.41 lakh units. Hero MotoCorp’s sales were up 8 percent to 6.87 lakh units, broadly in line with expectations. Royal Enfield recorded its best-ever festive performance with sales of 1.24 lakh units, up 43 percent from last year.

Analysts at Motilal Oswal said retail sales in September were strong across categories due to GST cuts and pent-up demand, with a notable pick-up in entry-level vehicles. They expect discounts to ease after the festive season as demand strengthens. The brokerage named Maruti Suzuki as its top pick, citing new launches and export momentum, while highlighting M&M as another key beneficiary given growth in tractors and utility vehicles.

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