Auto Stocks Gain Ahead of November Sales; Mahindra, Bajaj See Uptick

Market Performance

The auto sector opened the week on a positive note as the Nifty Auto index rose nearly 1% on December 1. Early trading showed optimism across the board, with 12 out of 15 constituents in the green.

Investor sentiment was lifted ahead of the November wholesale sales numbers, with signs pointing to strong demand across key segments.

Main News: November Sales Driving Momentum

Bajaj Auto emerged in focus after reporting a robust rise in November sales.

• Total sales: 4,53,273 units, up 8% year-on-year.
• Exports: Jumped 19% YoY.
• Domestic sales: Increased 3% YoY.

Mahindra & Mahindra saw SUV sales to dealers jump 22% in November year-on-year, fueled by strong consumer demand and favorable tax incentives.

The government’s move to reduce goods and services tax on SUVs with engines above 1500 cc—from about 50% to 40%—has played a crucial role in boosting sales. Notably, around 80% of Mahindra’s SUVs fall under this engine category.

Mahindra also launched a seven-seater electric SUV last week, contributing to a total of 56,336 SUVs sold in November.

Company Highlights

Bajaj Auto

• Total sales: 4,53,273 units
• Exports growth: 19% YoY
• Domestic growth: 3% YoY

Mahindra & Mahindra

• SUV sales growth: 22% YoY
• 80% of SUVs with an engine >1500 cc
• November SUV sales: 56,336 units

Other major players in the segment are yet to release their November sales numbers, keeping market watchers attentive.

Market Dynamics

Several factors are shaping the auto sector rally:

• GST cuts: Reduced tax rates for higher-engine SUVs have improved affordability.
• Interest rates: Lower financing costs are encouraging buyers to upgrade their vehicles.
• Festive and rural demand: Strong seasonal demand continues to support growth.

Despite the early morning gains, partial profit booking was seen, with the Nifty Auto index trading 0.5% higher around 11:20 am.

Summary

The auto sector is showing steady momentum ahead of November wholesale sales data. With Mahindra & Mahindra and Bajaj Auto posting strong growth, supportive tax policies, and robust rural demand, the Nifty Auto index continues to attract attention.

Investors are closely monitoring upcoming sales reports from other key auto players, as these figures could shape the Nifty Auto index’s movement in the coming days.