Auto Stocks Skid Up to 6%: Bajaj Auto Tumbles and M&M Hits 52-Week Low After September Sales Miss Estimates
15 hours ago
Major Indian automotive shares experienced a sharp sell-off following the release of September sales data, dragging the Nifty Auto index down 3% to an over four-month low of 25,507. Bajaj Auto shares tumbled nearly 6% to Rs 10,257, hitting their lowest level in more than 11 weeks, while Mahindra & Mahindra (M&M) fell approximately 4% to touch a fresh 52-week low of Rs 2,843.65. Other major vehicle manufacturers like Hero MotoCorp also dropped 4%, making the auto sector the top loser across sectoral indices.
Bajaj Auto reported total September sales of 538,443 units, missing analyst expectations of 585,000 units. The primary trigger for the stock decline was a 12% year-on-year (YoY) drop in domestic two-wheeler sales, which fell below 2.4 lakh units compared with 2.73 lakh units in September 2025. Total domestic sales across all categories for Bajaj Auto contracted 9% YoY to 2.94 lakh units. However, the domestic decline was partially buffered by a 34% surge in two-wheeler exports (2.12 lakh units) and a 32% jump in total exports, bringing total monthly sales up 5% YoY.
Mahindra & Mahindra’s overall vehicle sales grew 15% YoY to 114,874 units, driven by domestic utility vehicle (SUV) sales rising 14% YoY to 64,092 units—slightly ahead of market estimates. Despite robust passenger vehicle demand, investor sentiment was heavily dragged down by the agricultural equipment segment. M&M’s total tractor sales plummeted 21% YoY to 52,100 units, falling significantly short of the Street's estimate of 57,433 units. M&M noted that this sharp decline was largely due to a shift in the festive season timing into October and a high comparison base from 2025's GST rate cut.
Compounding the short-term sales setbacks, automakers faced additional pressure following regulatory updates. The Ministry of Power notified stricter Corporate Average Fuel Economy (CAFE) norms for 2027–2032, targeting a 16.7% improvement in fleet fuel efficiency over five years. The new framework introduces tighter consumption benchmarks alongside super credits and flexibility for electric, hybrid, and alternative fuel vehicles.
