Auto stocks decline despite robust sales in festival season

Shares of automobile manufacturers declined on Friday, despite recording a sustained growth in sales and demand amidst the festival season. While the share price of leading automobile manufacturers such as Tata Motors, Mahindra & Mahindra, and Maruti Suzuki dropped up to 3%, the nifty auto index, which was the biggest laggard on the sectoral indices on Friday, plunged 1.09% at 13,048 points. 

The BSE Sensex was trading 412 points, or 0.65%, lower at 62,871, whereas the Nifty 50 index declined 111.90 points, or 0.59%, to 18,700.  

On Friday, the share price of Maruti Suzuki, which is the country’s largest automobile manufacturer, declined 1.65% or 151 points at ₹8,805. The company reported a 20.6% year-on-year (YoY) surge in the sale of its passenger vehicles to 1,32,395 units in November this year. The company’s domestic sale for commercial vehicles witnessed a growth of 19.4%. During the session, the market capitalization of the automobile major stood at ₹2.65 lakh crore with as many as 12,450 stocks trading hands at the Bombay Stock Exchange as against the two-week average of 0.27 lakh shares. 

Meanwhile, the share price of Tata Motors fell 0.55% to ₹435. The company’s cumulative sales in the domestic and international market witnessed a surge of 21.3% YoY to 75,478 units, and domestic sales witnessed a growth of 27% to 73,467 units in November. During the session, the auto major’s market capitalization stood at ₹1.4 lakh crore with as many as 4,21,182 shares changing hands in the BSE as against the two-week average of 6.35 lakh. 

Shares of Mahindra & Mahindra slumped 2.41% to ₹1,262 even as the company witnessed an uptick in its overall sale by 45.39% YoY at 58,303 units in November this year as against 40,102 units in the same period last year. During the session, the company’s market capitalization stood at ₹1.56 lakh crore, with as many as 1,11,860 shares exchanging hands on the BSE as against the two week average of 1.08 lakh. 

Notably, the shares of two-wheeler and three-wheeler vehicle manufacturers witnessed a mixed trend. At the time of reporting, the share price of Hero Motocorp declined by 1.56% at ₹2,825, whereas the stocks of TVS Motors plunged marginally to 0.07% at ₹1,048. While Hero Motocorp witnessed a robust growth of 12% YoY to 3,90,932 units in November this year, the total sales of TVS Motors increased marginally by 2% YoY at 2,77,123 units. Eicher Motors, the parent company of Royal Enfield motorcycles, was trading 2.92% or 100 points lower at ₹3,337, despite registering a jump in its sales by 37% YoY to 70,766 units in November. 

Meanwhile, Bajaj Auto continued its losses with the share price of the company witnessing a decline of 1.01% at ₹3,670 as the total sales of Bajaj Auto witnessed a decline by 19% YoY to 3.06 units.