Nifty Auto slipped 3% to an over four-month low after September sales numbers from key automakers disappointed market expectations. Bajaj Auto came under the sharpest pressure as domestic sales declined 9% year-on-year.
Highlights:
- Nifty Auto fell 3% to 25,507, its lowest level in over four months.
- Bajaj Auto shares dropped as much as 6% in intraday trade, while Hero MotoCorp and M&M fell around 4%.
- Bajaj Auto sold 538,443 units in September, below analysts’ expectation of 585,000 units.
- Bajaj Auto’s domestic sales declined 9% YoY, though exports jumped 32%.
Auto Stocks Under Heavy Selling Pressure
Shares of Indian automobile companies came under selling pressure after September sales figures from major manufacturers, including Bajaj Auto and Mahindra & Mahindra (M&M), fell short of market expectations.
The Nifty Auto index declined around 3% to 25,507 during intraday trading on October 1, touching its lowest level since May 18, 2026. The auto index has also fallen about 10.5% over the past month, compared with a 6.4% decline in the benchmark Nifty 50.
Among individual stocks, Bajaj Auto was among the biggest losers, falling as much as 6% in intraday trade. Hero MotoCorp and M&M declined around 4% each. Ashok Leyland, Eicher Motors, Tata Motors Commercial Vehicle and TVS Motor Company also fell around 3%.
Auto ancillary stocks, including Uno Minda, Samvardhana Motherson International and Bharat Forge, also faced selling pressure.
Bajaj Auto Sales Miss Expectations
Bajaj Auto reported total sales of 538,443 units in September 2026, up 5% from 510,504 units in the same month last year. However, the number was below analysts’ expectations of around 585,000 units.
The company’s domestic sales declined 9% year-on-year to 294,456 units from 325,252 units. In contrast, exports remained strong, jumping 32% to 243,987 units from 185,252 units a year earlier.
M&M Tractor Sales Fall 21%
Mahindra & Mahindra reported overall auto sales of 114,874 vehicles in September, representing 15% year-on-year growth including exports. However, analysts had expected sales of around 121,500 vehicles.
The bigger disappointment came from the tractor business. Total tractor sales declined 21% to 52,100 units from 66,111 units in September 2025.
M&M attributed the decline primarily to the shift in the festive season to October this year and a higher base in September 2025.
New CAFE Norms Add to Auto Sector Focus
The auto sector is also assessing India’s new Corporate Average Fuel Economy (CAFE) norms for passenger vehicles, which will apply from April 1, 2027.
The framework tightens fleet-average fuel consumption requirements progressively through 2031-32. Automakers will have multiple compliance options, including electric vehicles, hybrids, flex-fuel vehicles, alternative fuels and approved fuel-saving technologies.
The combination of weaker-than-expected September sales and changing regulatory requirements kept automobile stocks in focus.
