The Nifty auto sectoral index has seen a good rally for several months now, with only a few dips in between. The robust growth in the automobile sector is owed to the impressive sales figures of two-wheelers, personal vehicles, and commercial vehicles, with the former leading the pack. Individual stocks in the index are also witnessing a sustained rise. The performance of stocks like M&M, Tata Motors, and Eicher, for instance, has raised great hopes among investors in the sector. The M&M share price has rallied from Rs. 1454.60 on 1st Nov 2023 to Rs 1676.70 before 5th Feb 2024.
The performance of Nifty Auto has been a major driver in the growth of the cumulative Nifty 50 index. Even in 2023, the auto sector emerged in green in 8 of the 12 months. The Maruti share price has jumped Rs 558 in the past month to cross the 10,500 mark in Feb 2024. This bodes well for the auto sector as a whole and reposes investor faith.
What are the Nifty Auto stocks?
The Nifty Auto index is a collection of 15 stocks in the automobile sector. It presents the performance of the listed NSE stocks in the sector. Gauging the sectoral performance gives you a better idea of the Nifty 50 index and how sectoral performance affects the overall index. This index is based on the free float capitalization method. Here’s an overview of the 15 stocks in Nifty auto right now:
1. Tata Motors
Tata Motors comes under the Tata Group of companies. Tata Motors is involved in the manufacturing of a wide variety of vehicles. Their vehicle range includes personal cars, EVs, trucks, buses, luxury and sports cars, military vehicles, and vehicle equipment too.
2. M&M Ltd
The Mahindra and Mahindra Ltd is a multinational company with a huge presence in the automobile sector. The company shines in producing 2W/PV/CVs. M&M brings out some of the robust tractors and SUVs and has an enviable track record. Investors thus keep track of the M&M share price all the time.
3. Bajaj Auto
The name Bajaj is synonymous with the Indian automobile industry and its prowess in manufacturing quality 2- and 3-wheelers is well known. From Bajaj scooter to Bajaj Pulsar, the brand value of Bajaj Auto is impeccable. The company is one of the mainstays of the automobile industry in India.
4. Eicher Motors
Who hasn’t seen the beauty that is ‘Royal Enfield’?! This popular Eicher Motors product is so popular that it has eclipsed the company’s name itself! People may or may not know of Eicher Motors, but they definitely know of Enfield! The company also manufactures heavy commercial vehicles apart from motorbikes.
It is hard to imagine a vehicle that doesn’t use the MRF tires. Apart from being the sponsor for Sachin’s bat, the company makes some of the strongest off-the road (OTR) tires in the world! MRF churns out robust two-and four-wheeler tires every year and exports to more than 90 countries.
6. Bharat Forge
Bharat Forge is part of the Kalyani Group of companies, a $3 billion multinational company. It is the largest forging company in the world and produces high-quality metal parts and components for various industries. Apart from the automobile sector Bharat Forge serves rail, aerospace, marine, and other sectors as well.
7. Hero MotoCorp
Hero MotoCorp is India’s premier 2W manufacturer. It’s best known for producing affordable two-wheelers for the masses. The company’s ‘Splendor’ model is a huge hit in the Indian market. The company has a 46% share in the domestic two-wheeler market.
8. Sona Comstar
Sona Comstar has made its way into the Nifty auto index on the back of its superb performance over the last year. The Indian-origin automotive technology company excels in making precision-engineering products like critical automotive systems, BSG systems, EV traction motors, and automotive OEMs.
9. Motherson Sumi
Motherson Sumi is another leading performer in the automobile and transport industries. The company manufactures wiring harness, vision systems in vehicles like interior and exterior mirrors, premium upholstery, and integrated assembly solutions for these industries.
10. Bosch Limited
Bosch is a trusted name in the delivery of mobility solutions technology. The company has its 2nd largest development center in India, after Germany. Bosch makes hardware and software to provide smart mobility services to the automobile industry.
11. TI India
Tube Investments of India Ltd is one of the oldest companies in India with a revenue of 7236 crores as per the company’s website. It has been in the automotive industry for over 70 years now. The company is known for producing quality tubes and metal casings.
12. Balkrishna Industries
Balkrishna Industries produces wide-ranging tires for the agriculture and the OTR industry. It is known for making high-quality tires for tractors, harvesters, and off-the-road vehicles. The company also manufactures tubes and carbon black. Balkrishna Industries clocked an impressive revenue of Rs 9810 Cr in FY 2023.
13. Ashok Leyland
This Hinduja Group owned company is a multinational automotive manufacturer. Ashok Leyland is one of the leading manufacturers of commercial vehicles in India (2nd largest). An Ashok Leyland bus or truck is recognized for its quality around the world and the numbers prove it.
14. TVS Motor
TVS is the third-largest producer of two-wheelers in India. It also manufactures three-wheelers. The company is over 100-years old and produces some great mopeds, scooters, and racing bikes. TVS clocked a revenue of almost Rs 320 billion in 2022-23.
With a market share of 42%, Maruti Suzuki is the premier car-manufacturer in India. For more than 40 years, the company has kept its hold in the Indian market due to its compact and affordable hatchbacks and SUVs. The company is eyeing more than 50% share in the domestic market and it has reflected in the Maruti share price.
Top gainers and losers in Nifty Auto
Here’s a list of the top gainers and losers in the Nifty auto sectoral index as of 5th February 2024. Tata Motors, M&M, Bajaj Auto, Eicher Motors, MRF, and Bharat Forge are clear winners while TVS Motors and Maruti Suzuki saw a slump. The index is currently at the 19,655.85 mark (opening on 5th Feb 2024) and has given a magnificent 28% return in the last six months.
Key Takeaway: Outlook on the Nifty Auto sector
If we analyse the performance of the Nifty auto index in the past year or two, we would see that it has grown immensely on account of the strong sales figures seen by the automotive industry. Shareholders who stayed invested in the index for the last 5 years made a 129% return! The rally in the M&M share price and others have shown great promise. Analysts like Rupak De (LKP Securities) and Sanjay Moorjani (SAMCO Securities) have recommended investing for the short and mid-term.