Tata Motors, M&M, Bajaj Auto among other stocks vroom amid hopes of better February sales figures

Auto stocks on Tuesday zoomed amid expectations of better sales in February. The Nifty Auto and BSE Auto Indieces were among the top sectoral gainers today as each ended around 0.5 per cent higher on Tuesday.

Shares of Tata Motors, Mahindra and Mahindra, Bajaj Auto, and Maruti Suzuki were among the top Nifty50 gainers today. While auto counters from broader markets like Samvardhana Motherson International Limited and Ashok Leyland were up between 2-3 per cent on the NSE. 

Among 15 stocks from Nifty Auto Index, 8 were in the green, while the remaining were in the red on Tuesday at the market close today. 

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The surge in the auto stocks can be attributed to the Street’s high hopes from February 2023 sales numbers, which is scheduled to be released on March 1, 2023, Wednesday. 

According to Motilal Oswal’s report, the auto sector is expected to report strong sales figures in February 2023, wherein retails are expected to grow at 8-12 per cent year-on-year across segments. 

The surge in sales will mainly be led by multiple positive factors such as a healthy uptick in the urban markets, marriage season in some northern regions, and improved demand for two-wheelers. 

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The two-wheeler category, which was lagging as compared to cars and trucks, also expected to show slight improvement amid rising demand; however, broad-based recovery has a long way to go, it said. 

Even YES Securities believe the uptick in rural demand in the two-wheeler category may help the segment register a good show in February on a month-on-month basis. 

The auto reported a good set of numbers for the December quarter earnings of this fiscal as healthy demand momentum sustains as supply-side issues are largely over, analysts at Motilal Oswal said. 

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They added that some benefits of softening commodity prices are yet to flow through in the fourth quarter of this fiscal, while the major benefits already captured in the quarter ended on December 31, 2022. 

Sustained demand recovery, improving chip supplies, and softening commodity prices are expected to drive performance going forward, the analysts also noted as triggers for the sector.

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