Racing Ahead! Nifty Auto hits record high, crosses 14,500 mark for first time

On the back of strong monthly sales and improved semiconductor chips shortage, Nifty Auto on Monday crossed the 14,500 mark for the first time and hit a record high of 14,530.8. Also, Indian stock markets rose today on strong global cues and optimism that the Federal Reserve would pause its rate hikes this month after a mixed US jobs report.

"Auto is making new highs as volumes are improving every month, commodity inflation is behind, and production issues are getting resolved. It only helped that Auto Index was among the worst performing indexes in FY22 and hence bounce back was also with a vengeance in FY23," Kashyap Javeri, Fund Manager, Emkay Investment Managers, said.

In the last month, the Nifty Auto index has surged 9%, compared to the 3% rise in the Nifty 50. M&M and Ashok Leyland shares were up over 2% on intraday trade. Maruti, Tata Motors, and Tube Investment India also surged between 1-2%. However, BalKrishna Industries, TVS Motor, Hero MotoCorp, and Sona BLW Precision Forgings declined.

Reshma Banda, Head – Equity & EVP, Investments, Bajaj Allianz Life, said, "We have a positive outlook on Auto and Auto Ancillary space as the supply side challenges are easing out and demand to sustain with rural recovery, but likely to be selective on some stocks particularly due to recent run-up in the valuation."

As per the regulatory filing, Mahindra and Mahindra (M&M) passenger vehicles stood at 32,886 units in May 2023, up 22% from sales of 26,904 units in the same month a year ago. Of the total, SUV sales climbed by a whopping 23% YoY to 32,883 vehicles.

In Q4FY23, M&M reported a 22% year-on-year (YoY) rise in standalone net profit to Rs 1,549 crore, while revenue jumped 31% to Rs 22,571.37 crore.

Meanwhile, Maruti Suzuki's standalone net profit jumped 43% YoY to Rs 2,624 crore for the quarter ended March 2023. Its revenue from operations surged 20% YoY to Rs 32,048 crore for the fourth quarter. It also reported a 10% increase in total wholesales at 1,78,083 units in May. Total domestic passenger vehicle sales were higher by 15% to 1,43,708 units as compared with 1,24,474 units in the same month last year.

Last week, Tata Motors also said its electric vehicle sales of domestic and international business in the passenger vehicles segment went up 66% to 5,805 units in May 2023, against 3,505 units in the year-ago period. Its total sales in May 2023 were 73,448 units, against 74,755 units in the year-ago month.

The automaker reported a net profit of Rs 5,407.8 crore in the quarter under review against a loss of Rs 1,032 crore in Q4FY22. For the quarter ended March 31, 2023, the auto also posted a 35% YoY jump in consolidated revenue to Rs 105,932 crore.

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