Tata Motors, Maruti: Rally in auto stocks may pause for now, say analysts

After a phenomenal rally since March 2020 low that saw the Nifty Auto index jump 132 per cent since then compared to a 93 per cent gain in the Nifty50, the rally in auto stocks may pause for now as demand cools off and companies grapple with supply-side issues, say analysts.

Valuation at which some of the auto stocks are trading at is another concern. "PV manufacturers are trading at expensive valuation and I do not find much comfort there. Instead, investors can look at two-wheeler manufacturers and auto ancillaries. They are a better bet given the current industry dynamics.