The automobile stocks were trading higher on Monday on the back of reasonably steady sales in February. The Nifty Auto is up as much as 1.8% and the top index gainers include Eicher Motors, M&M. Analysing the overall trend in the auto sector, Motilal Oswal highlighted that, “in PVs, we noted a sustained outperformance by both Maruti Suzuki and M&M relative to peers. Demand across segments remains weak, except for tractors, where we expect dispatches to remain positive in the near term, driven by positive farm sentiment.”
Motilal Oswal’s top automobile picks
Motilal Oswal has identified Mahindra & Mahindra and Maruti Suzuki as the top picks in the automobile sector. “Maruti Suzuki is our top pick among auto OEMs, as its upcoming new launches are expected to continue to help improve the mix and drive healthy earnings growth. We also like M&M given the upcycle in tractors and healthy growth in UVs,” stated Motilal Oswal.
Mahindra & Mahindra’s share price rose 4.3% to an intra-day high of Rs 2,695.95 after it surged past Hyundai to become the second-best-selling carmaker in February 2025. The stock was among the top gainers in the Nifty 50. Mahindra‘s domestic sales stood at 23,880 units in February, as against 20,121 units in the same month of 2024, an increase of 19%. However, the share price of M&M has fallen 4.6% in the previous five trading sessions. The stock erased 17% of investors’ wealth.
Maruto Suzuki share price rose 1% to an intra-day high of Rs 12,059.45 on Monday.
February auto sales inline with Motilal Oswal’s estimates
According to the Motilal Oswal report, PV wholesales grew 2% YoY, aligning with their expectations. “Among listed peers, Maruti Suzuki India and M&M outperformed during the month.” Maruti Suzuki’s PV volumes rose 1% YoY to 1,99,400 units despite a high base. Its domestic SUV volumes increased 6% YoY, while non-SUV volumes remained largely flat, resulting in 4% YoY growth in overall domestic volumes. Further, “M&M’s UV volumes (including pick-ups) rose 19% YoY, reflecting sustained momentum in its SUV models. In contrast, Hyundai’s domestic volumes declined 5% YoY, while exports grew 7% YoY, leading to an overall volume decline of 3% YoY to 58,700 units. Meanwhile, Tata Motors continued to underperform, with PV volumes declining 9% YoY.”
Tractor sales above Motilal Oswal’s sales estimates
Motilal Oswal further stated that, “M&M continued to outperform Escorts in tractors. Both the management sounded positive on tractor demand outlook.” M&M, in its press release, indicated that tractor demand sentiment remains positive, driven by a good Kharif crop, a favorable Rabi outlook, increased agri credit, and continued government support. This is also being taken as a key trigger driving their decision to keep M&M as a top pick in the auto section.
Other auto stocks shine on Feb sales boost
Eicher Motors up 3%
Eicher Motors’ share price advanced almost 3% to an intra-day high of Rs 4,910.95, top gainer in the Nifty 50. It reported a total sales of 8,092 units in February 2025, while it sold 90,670 motorcycles in February 2025, up by 19% from the same month last year. Royal Enfield exported 9,871 motorcycles in February as compared to 8,013 during the same period last year. The share price of Eicher Motors has fallen 3% in the last five trading sessions.
TVS Motor jumped 4.6%
The share price of TVS Motor jumped 4.6% to the day’s high of Rs 2,328.25. The company reported a two-wheeler sales growth of 10% to 3,91,889 units in February 2025, as against 3,57,810 units in February 2024. Its motorcycle sales rose 5% from 1,84,023 units in February 2024 to 1,92,960 units in February 2025. The scooter sale increased 24% from 1,32,152 units in February 2024 to 1,64,415 units in February 2025.
However, Tata Motors’ passenger vehicle sales dropped 9% in February 2025. The carmaker sold 46,435 units last month compared to 51,267 units in February 2024. The share price of Tata Motors declined 2.3% to its 52-week low of Rs 606.30. The stock is now down more than 47% from its July high of Rs 1,161.85.