Auto shares in demand; TVS Motor hits new high, M&M, Eicher rally 2%

At 10:19 AM; BSE Auto index and Nifty Auto index, the top gainers among sectoral indices, were up 1.3 per cent each, as compared to 0.5 per cent rise in the BSE Sensex and Nifty 50.

Shares price of automobile companies

 

Shares of automobile companies were in demand, with the BSE Auto index surging over 1 per cent in Thursday’s intra-day trade as brokerages maintained a positive outlook for the industry, supported by multiple structural and cyclical tailwinds.

 

At 10:19 AM; the BSE Auto index and Nifty Auto index, were the top gainers among sectoral indices, up 1.3 per cent each, as compared to 0.5 per cent rise in the BSE Sensex and Nifty 50. The BSE Auto index hit an intra-day high of 60,446.10. It had hit a record high of 61,946.82 on September 23, 2025.

 

Among individual stocks, TVS Motor Company stock hit an all-time high of ₹3,631.95, up 2 per cent on the BSE in intra-day trade. The stock price of the two-wheeler company surpassed its previous high of ₹3,605.55 touched on September 9, 2025.

 

Mahindra & Mahindra (M&M), Tata Motors, Eicher Motors, Ashok Leyland, Bajaj Auto and Hero MotoCorp were trading higher in the range of 1 per cent to 2 per cent.

Auto sector outlook

 

The recent Goods and Services Tax (GST) restructuring has provided a significant boost to India’s automobile sector, driving demand revival – especially among price-sensitive buyers impacted by rise in costs due to stricter emission norms and OEM-led price hike. Owing to this, along with the onset of the festive season, the two-wheeler, passenger cars and tractor segments saw strong sales towards the end of Q2FY26.

 

Additionally, China lifting restrictions on rare earth magnet exports to India offers short- to medium-term relief for electric vehicle (EV) and auto component manufacturers, though long-term resilience remains a priority, analyst at Choice Equity Broking said in the auto sector update.

 

On the domestic front, strong rural demand – supported by an above-normal monsoon (106–108 per cent of LPA) and increased kharif sowing – has improved rural sentiment, aiding demand for two-wheelers and tractors. The industry outlook remains optimistic, with festive stocking, reduction in GST rate, and income tax relief as key variables for demand in H2FY26.

 

With the forward P/E valuation just above the 10-year mean and the Nifty Auto Index traditionally providing 40 plus per cent compound annual growth rate (CAGR) for a two-to-three year business upcycle vs. a 20 per cent run-up seen since Mar 2025 lows, analysts at InCred Equities reiterated Overweight rating on the sector.

 

Wholesale volume prints for the month of September 2025 came in healthy. All segments reported positive YoY growth with management commentary upbeat on festive sales post GST rate cut. Stage is all set for domestic auto space to scale new peaks in FY26E. September 2025 all witnessed some OEM’s reporting all time high monthly volume numbers, said analysts at ICICI Securities in the sector report.  ALSO READ | Indian Hotels, Lemon Tree, ITDC gain up to 4% on strong business outlook 

Notably, exports continue to stage a healthy growth on YoY basis for most of the OEMs. Commercial vehicle (CV) space reported healthy volume prints for the month of September 2025 with green shoots of recovery visible in the light commercial vehicle (LCV) segment.

 

Meanwhile, analysts at Axis Securities expect positive earnings with improvement across certain companies, due to an increase in domestic demand, supported by the GST rate cut and the festive season. 

 

The brokerage firm also anticipates the Tractor segment to perform better than the 2W/PV/CV, supported by favourable monsoon and higher water reservoir levels, leading to a revival in rural demand. Additionally, export volume recovery is supporting earnings visibility in FY26 and beyond, analysts said in Q2FY26 earnings preview.

 

PV sales are expected to improve on a high base, while new product launches from certain OEMs in the SUV segment are anticipated to drive growth. Demand for entry-level vehicles is expected to improve further on account of the current GST rate cut, the brokerage firm said.