The Nifty Auto index pared gains in Thursday's trade after touching a fresh record high earlier in the session, as investors booked profits.
Eicher Motors, Bajaj Auto, Tube Investments of India and Maruti Suzuki India were among the major losers, declining up to 3 percent. The index slipped nearly 0.5 percent after hitting an all-time high of 27,832.60 in early trade. The move was in line with the benchmark indices Sensex and Nifty which also scaled record levels before paring gains.
Bajaj Auto, which had risen for three straight sessions, reversed course and traded lower. Overall, nine of the 15 constituents of the Nifty Auto index were in the red. The index has closed lower in four of the past five sessions.
The sector has been in focus in recent months following Prime Minister Narendra Modi’s Independence Day 2025 announcement of “next-generation” GST reforms. The GST Council meeting in September 2025 later approved a rate cut on most vehicles and components to 18 percent from 28 percent. The reduction has since taken effect.
The Nifty Auto index had rallied more than 4 percent to 25,127.20 on August 18, 2025, after the GST-related announcement on August 15. From that level to Thursday’s record peak of 27,832.60, the index has gained 2,705.4 points or 10.76 percent.
According to analysts at Yes Securities, festive passenger-vehicle retail sales recorded broad-based growth across metro, tier-1 and rural markets. The share of first-time buyers increased by 4–5 percent across regions. Small cars saw a 30–40 percent rise, driven by rural demand and higher discounts, while premium hatchbacks and SUVs also remained firm. Analysts noted that the pick-up was largely discount- and GST-led, supported by the marriage season, but cautioned that sustainability beyond January 2026 is uncertain as discounts moderate.
Choice Institutional Equities said it remains constructive on the sector over the next few quarters, citing benefits from GST 2.0, steady rural income trends and seasonal triggers such as weddings and agricultural cash flows. It expects festive spillover demand in November–December, improved stock availability, new model launches, year-end retail schemes and new-year registrations to support volumes. The brokerage added that calibrated price hikes and a better product mix should aid margins.
The two-wheeler segment is also expected to see momentum, supported by improved affordability following lower GST rates, adequate financing and firm rural demand linked to healthy crop output and the marriage season.
Brokerage Nuvama said sequentially higher discounts and fresh product launches are positive for the passenger-vehicle segment. It estimates Tata Motors’ passenger-vehicle volumes at 55,500 units, up 18 percent year-on-year. Maruti Suzuki India’s volumes are projected to rise 16 percent to 210,000 units, with estimates for Hyundai awaited.
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