1 hr ago
Auto Stocks Gain Ahead of September Sales Data
Auto companies may sell many more vehicles in September than they did last year.
One reason is that last September, some buyers waited for new GST rates to begin.
Demand is also being helped by festival shopping, new vehicle models and better affordability.
Retail sales have grown strongly, and dealerships are carrying relatively few unsold vehicles.
Lower interest rates and growing electric-vehicle adoption may also support purchases.
Higher prices for materials remain a concern for automakers and parts suppliers.
However, companies have raised vehicle prices to reduce the effect of those higher costs.
MOFSL expects company profits to improve gradually from the second quarter of FY27.
It prefers Maruti Suzuki, TVS, M&M and Bajaj Auto among automakers.
MOFSL expects strong September auto volumes due to low Q2FY27 comparables, festive demand and lean channel inventory.
Choice Institutional Equities forecasts approximately 30% September growth, supported by deferred purchases in September 2025 and GST-rate changes.
Strong retail sales, recent model launches, EV adoption, softer interest rates and improved affordability are supporting demand.
Price increases by automakers are expected to offset commodity-cost pressures and help margins recover gradually from Q2FY27.
MOFSL’s preferred automakers are Maruti Suzuki, TVS, M&M and Bajaj Auto, while its ancillary picks include HFL, MSWIL and SAMIL.
- Who
- MOFSL and Choice Institutional Equities provided the outlook; automakers and auto-ancillary companies are affected.
- What
- Analysts expect strong Q2FY27 auto sales and gradually improving sector margins, and identified preferred stocks.
- Where
- The report concerns the domestic auto market; a specific location is not stated.
- When
- The outlook covers Q2FY27, including September and July–September 2026.
- Why
- Demand is supported by a low comparison base, strong retail sales, festive purchases, recent launches, EV adoption, softer interest rates and improved affordability.
Key facts
- Expected September growth
- Choice Institutional Equities expects approximately 30% full-month growth.
- Demand drivers
- Festive demand, strong retails, recent model launches, EV adoption and improved affordability.
- Inventory
- Channel inventory is described as lean, especially for passenger vehicles.
- Cost pressure
- Automakers and suppliers continue to face commodity-cost pressure.
- Margin outlook
- Margins are expected to recover gradually from Q2FY27.
- Automaker picks
- Maruti Suzuki, TVS, M&M and Bajaj Auto.
- Ancillary picks
- HFL, MSWIL and SAMIL.
Quotes
Choice Institutional Equities
Institutional equities research firm
“Due to the low base of Q2 and channel push ahead of festive, volumes so far in Q2FY27 have been strong and is expected to be the same for September on account of strong retails and lean channel inventory (especially for PVs),”
businesstoday.in
“The growth for September, looks exceptionally high on a low base, as buyers deferred purchases last September until the revised GST rates took effect on September 22, 2025.”
businesstoday.in
Sources
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