Auto stocks remained under sharp selling pressure on Wednesday, with the Nifty Auto index falling more than 3 per cent as a renewed surge in crude oil prices following an escalation in -n tensions weighed on sentiment. The decline came despite broadly strong August sales reported by automakers and positive demand commentary from brokerages.
In today’s session, auto fell over 3 per cent to 27,541.65. Except TMPV all other counters traded in red.
and were among the biggest losers, losing 6-7 per cent, while Bajaj Auto, Mahindra & Mahindra, Uno Minda, Ashok Leyland, TVS Motor, Maruti Suzuki and Bharat Forge also traded lower.
Sales remain strong
Jefferies said auto demand momentum remained strong in August for two-wheelers, passenger vehicles and trucks, with registrations up 24-29 per cent y-o-y, while tractors grew 3 per cent y-o-y.
The brokerage estimated domestic wholesales grew around 36-43 per cent y-o-y for passenger vehicles and trucks, and 10 per cent for two-wheelers and tractors. Wholesales rose 56 per cent y-o-y for TMPV, 21-38 per cent for Ashok Leyland, M&M, Bajaj Auto, Maruti Suzuki and TVS Motor, 9-11 per cent for Eicher Motors (RE) and Hyundai, and 3 per cent for Hero MotoCorp.
Compared with its estimates, Jefferies said August wholesales were in line for Maruti Suzuki, Hero MotoCorp and Hyundai, and ahead for the rest.
Nomura said strong demand continued, with MHCVs surprising positively. It said TMCV and Bajaj Auto were well ahead, while Maruti Suzuki, Hyundai and TVS Motor missed due to supply constraints. The brokerage continued to prefer M&M, Hyundai Motor, TMCV, TVS and Sonacoms.
Citi said y-o-y volume growth for most OEMs was strong in August 2026, aided by a weak base of August 2025, when dispatches in the second half of the month were affected by the GST-cuts announcement on August 15, 2025. It added that a delayed festive season had some negative impact on y-o-y trends.
On a m-o-m basis, Citi said delayed channel restocking could have impacted volumes, as reflected in the disparity between retail and wholesale data for some two-wheeler OEMs. The brokerage said it was particularly impressed by CV volume growth for Ashok Leyland and TMCV. Its preference order is Maruti > Eicher > M&M.
Axis Direct said the overall industry outlook for FY27 remained positive, driven by healthy demand momentum, improving rural sentiment, premiumisation, rising EV adoption and new model launches. However, it expects growth to moderate in H2FY27 due to the high base of H2FY26, while rising input costs, higher vehicle prices and uneven monsoon conditions could partially offset the demand recovery.
In the long term, Axis Direct prefers Bajaj Auto and TVS Motor in two-wheelers, and M&M as a play in the PV/LCV/Tractor segment. It also likes Ashok Leyland and Tata Motors in the CV space, followed by a close watch on Eicher for any market share gains.