The Nifty Auto index gained more than 1 per cent in intraday trade today after the Federation of Automobile Dealers Associations (FADA) released February 2026 vehicle retail data. The Nifty Auto index made a high of 27,214.70, before paring the gains to trade half a per cent higher at 27,032 around 10:30AM.
Among the 15 constituents of the index, 11 counters traded higher with Bharat Forge emerging as the top gainer, up more than 3 per cent, followed by Samvardhana Motherson which climbed 2.5 per cent. Sona BLW gained 1.5 per cent, while M&M, Eicher Motors, TVS Motor, Hero MotoCorp gained in the range of 0.60 per cent to 1 per cent.
The
Nifty Auto index has outperformed the benchmark Nifty 50 consistently in the last few years. The Auto index has surged 30 per cent in the past year. In comparison, the
Nifty 50 index has gained 10 per cent in the same period. In three years, the Nifty Auto index has zoomed more than 110 per cent versus the nearly 40 per cent return generated by the Nifty 50 index.
Notably, the auto sector has witnessed significant buoyancy following the implementation of GST 2.0, effective September 22, 2025.
Best-ever Feb for 2W, 3W, CV, PV, tractors
According to FADA, February 2026 emerged as the best-ever February for 2W, 3W, CV, PV, tractors and overall retail. Data showed that retail vehicle sales jumped by 25.6 per cent Y-o-Y to 24,09,362 units.
C S Vigneshwar, FADA president, said that five out of six categories -- 2W, 3W, PV, CV and Tractors registered their highest-ever February retail volumes, clearly highlighting the strength of underlying demand in the market. The only segment which did not set a fresh February record was Construction Equipment, which saw a marginal decline of 1.22 per cent Y-o-Y.
"February 2026 has turned out to be a landmark month for the Indian auto retail sector, further strengthening the positive momentum seen after the
GST 2.0 announcement," he said and noted that the overall strong performance during the month indicates that the policy-led confidence in the market.
The sale of two-wheelers stood at 17,00,505 units, registering a growth of 25.6 per cent on a yearly basis, according to the data. FADA said that the growth in 2W remained broad-based, with urban accounting for +28.96 per cent and rural +22.16 per cent of growth on a Y-o-Y basis.
The sales of passenger vehicles grew by +26.12 per cent Y-o-Y to 3,94,768 units in the month under review. The rural market outpaced the urban with a growth of +34.21 per cent Y-o-Y, supported by a recovery in demand for small cars. The urban market clocked a growth of +21.12 per cent on an annual basis.
The sale of commercial vehicle sales rose by 28.89 per cent Y-o-Y to 1,00,820 units as the healthy momentum continued, supported by freight movement, e-commerce activity and infrastructure-led demand. The 3W (three-wheeler) sales recorded a growth of 24.39 per cent. GST 2.0 tailwind
The association said that the strong performance in February extended the momentum seen after GST 2.0, with improved affordability and market confidence translating into broad-based retail growth.
Deepak Jasani, an independent market expert, said the GST rate cut is still having an impact on auto sales. According to him, the tax cut continues to encourage fresh purchases, particularly among urban buyers who are making aspirational purchases.
Rural sales have remained steady and usually improve only when rural incomes rise, either due to higher minimum support prices (MSP) or better rainfall, he said. Auto sales: March outlook
On the outlook for March, he said that the month could give better numbers as car manufacturers will push for year-end discounts to attract buyers.
"Even the month of March could be a good month for the auto sector. From April, we could see some slump in Y-o-Y growth because people would have preponed their purchases by that time,” he said.
According to FADA, PV inventory was reduced further to 27–29 days, moving closer to its recommended 21-day benchmark and indicating healthier wholesale-retail alignment.
On the near-term outlook (March), it said that dealer sentiment remains largely positive, with 75.51 per cent of dealers expecting growth, while 19.90 per cent foresee a stable market and only 4.59 per cent anticipate a decline. Demand is expected to be supported by festivals (Navratri, Ramzan, Ugadi, Gudi Padwa and Eid) and financial year-end buying.
Maruti, TVS, Ashok Leyland preferred picks by ICICI Sec ICICI Securities said that healthy demand momentum (both retail and wholesale) was bolstered by the continued positive impact of the GST rate cut, product interventions by OEMs and robust exports.
On the 2W segment, it stated that the segment continued to report strong double-digit Y-o-Y growth, aided by healthy domestic demand. The PV also expanded by double digits, which was broadly in-line. For CVs, the recovery seen in recent months sustained in February, with strong double-digit Y-o-Y growth led by both medium and heavy commercial vehicles (MHCVs) and light commercial vehicles (LCVs). The tractor segment also continued its robust growth trajectory, increasing by about 5 percent over its estimate.
The brokerage said that Maruti Suzuki, TVS Motor and Ashok Leyland are its preferred picks in OEMs.
 "Record Feb dispatches lift Nifty Auto index 1%; GST 2.0 seen aiding demand")
