Nifty Auto Extends Losses For Second Straight Session, Automotive Stocks Drag Nifty Lower

Indian stock markets witnessed weakness for the tenth straight session as the benchmark indices Nifty50 and the BSE Sensex closed in the red on March 4. The Nifty50 closed lower by 45.2 points or 0.2 per cent at 22,082.65 levels and the 30-share Sensex closed lower by 96.01 points or 0.13 per cent at 72,989.93 levels. Notably, the Nifty50 has declined 3.65 per cent in the ten sessions and the 30-share Sensex has fallen 3.83 per cent in eleven sessions.

On March 4, auto stocks such as Bajaj Auto Ltd and Hero MotoCorp Ltd emerged as top losers among Nifty50 stocks. Shares of Bajaj Auto declined 5.15 per cent to hit an intraday low of Rs 7,317.05 apiece on the NSE. The Bajaj Group stock closed at Rs 7,332.95 apiece down by 4.95 per cent. Hero MotoCorp Ltd shares also slipped 3.73 per cent to an intraday low of Rs 3,495 apiece, the stock later closed at Rs 3,509.6 apiece down by 3.34 per cent.

Shares of Bajaj Auto and Hero Motocorp declined following the release of sales data for the month of February. Both two-wheeler makers saw a muted performance for the month of February. Ashwin Patil, Senior Research Analyst at LKP Securities told Outlook Money that disappointing domestic sales contributed to the decline witnessed by the two stocks.

“Two-wheeler stocks have come down in line with disappointing domestic sales itself, post heightened expectations after solid January numbers,” Patil said.

Bajaj Auto’s domestic two-wheeler sales fell by 14 per cent to 1,46,138 units in February 2025 compared to 1,70,527 units in February last year. Hero Motocorp also posted a 19 per cent drop in its domestic two-wheeler sales in February 2025 as the company sold 3,57,296 units compared to 4,45,257 units in the same month last year.

The decline seen in automotive stocks was not just limited to Bajaj Auto Ltd and Hero MotoCorp Ltd. The Nifty Auto index itself emerged as the biggest loser among all sectoral indices as it extended losses for the second straight session. The Nifty Auto index closed lower by 1.39 per cent at 20,252.45 levels on March 4. Notably Bajaj Auto and Hero MotoCorp also emerged as top losers among Nifty Auto constituents.

Among the 15 constituents of the index, there were 14 advances and 1 decline on March 4. Mahindra & Mahindra’s shares bucked the trend and closed in the green up by 0.04 per cent at Rs 2,612.85 apiece on the NSE. Mahindra is the biggest constituent of the Nifty Auto index in terms of weightage.

Despite the index's heavyweight closing in the green, the decline in the share prices of other key constituents of the index such as Maruti Suzuki India Ltd, Tata Motors Ltd dragged the index lower. Shares of Maruti Suzuki India Ltd closed lower by Rs 11,615 apiece down by 1.36 per cent and Tata Motors shares closed lower by 0.27 per cent at Rs 619.5 apiece on the NSE.

Patil said that the decline witnessed by automotive stocks was caused by lower-than-expected year-on-year sales from most major players apart from Mahindra & Mahindra. He added a slowdown in the personal vehicle sector also contributed to the decline seen in auto stocks.

“The auto sales for the month of February have come below street expectations. This is due to the weak year-on-year sales for most of the companies except for a few like Mahindra & Mahindra. The slowdown and competition in the PV sector have been the reason for PV stocks seeing a decline. Despite traction seen in rural sales, two-wheelers are yet to recover well in domestic markets,” Patil said.

Tata Motors posted an 8 per cent YoY drop as its domestic and international sales fell to 79,344 units in February compared to 86,406 units in the same month last year. The company’s overall sales of passenger vehicles and electric vehicles stood at 46,811 in February down 9 per cent compared to 51,321 units in the year-ago period.

Maruti Suzuki India Ltd's total sales grew marginally to 1,99,400 units in February compared to 1,97,471 units. The company’s domestic passenger vehicle sales for February 2025 stood at 1,60,791 units.