Among the most notable laggards, Tata Motors posted a steep 52% year-on-year (YoY) fall in Q4 net profit while its revenue barely grew by 0.53%. The stock has also dropped 5% in CY25 so far. Similarly, Apollo Tyres and Tube Investments of India struggled with declines in their profit after tax (PAT) at 48% and 42%, respectively, even as they reported modest growth in January-March quarter sales. These underwhelming showings are reflected in their stock performances too, with all three names delivering double-digit negative returns this calendar year.
Tyre manufacturers and ancillary firms faced particular headwinds. Balkrishna Industries’ PAT fell 24% and Bosch saw a marginal 2% decline, despite decent topline growth. Both stocks were down 16% and 8%, respectively, in CY25 as of Tuesday, June 3, 2025.
In contrast, two-wheeler manufacturers delivered a strong show, with TVS Motor leading the pack by clocking an impressive 71% YoY growth in Q4 PAT, supported by a 16% rise in revenue. Its stock has returned nearly 16% in CY25 so far. Eicher Motors’ 19% PAT growth and Bajaj Auto’s 11% uptick in bottom line were other notable performances. Also performed well. Eicher’s stock also delivered over 11% returns on the YTD basis.
M&M and Hero MotoCorp too reported positive earnings growth, with M&M registering 14% PAT growth on the back of robust 20% revenue expansion. Hero MotoCorp’s profit rose nearly 8%, though its CY25 return stands at just 1%.
Auto ancillaries such as UNO Minda and Sundram Fasteners saw their profits dip marginally, despite a healthy 19% revenue growth in the case of UNO Minda.Overall, the Q4 trend reveals a strong divergence between vehicle manufacturers and component suppliers, and also between two-wheeler firms and other categories like CVs and tyres. This divergence is mirrored in stock price performance for CY25, where only a handful of auto stocks have posted double-digit returns. Among them are TVS Motor with 16% returns, Maruti Suzuki at 12% and Eicher Motors at 11%, being the top three.
Commenting on the auto sector’s performance, “Om Ghawalkar, Market Analyst, Share.Market said that the domestic automobile sector achieved historic growth in FY2024-25, posting a 7.3% rise in domestic sales and a robust 19.2% jump in exports, signaling strong momentum across both local and global markets.
Citing SIAM data, Ghawalkar said that the passenger vehicle sales hit a record 4.3 million units, led by utility vehicles comprising 65% of the segment. “Exports also surged, particularly to Latin America, Africa, and developed economies, reaching 770,000 PV units. The two-wheeler segment saw 9.1% growth domestically, driven by scooters, while exports totaled 4.2 million units, dominating India’s overall vehicle exports, he said.
Auto Sales Data
Auto companies announced May automotive sales figures which reflected a mixed trend of dispatches across segments. The passenger vehicle segment’s domestic wholesale volume growth moderated although UV (utility vehicle) players reported healthy growth. All other segments, however, saw a recovery on a YoY basis.
Kumar Rakesh of BNP Paribas Securities in a note said that the 2W domestic wholesale growth improved and was similar to retail trends. The 2W exports continued to post double-digit growth YoY, helped by expansion in new regions by OEMs. “CV dispatches were flat YoY, but MHCVs saw improvement MoM. Tractors saw healthy growth YoY, largely driven by M&M,” he said.
Decoding the PV volume market share trends, Rakesh said that M&M gained YoY while Maruti Suzuki, Tata Motors, and Hyundai lost. As for the two-wheelers, TVS Motor, Royal Enfield (Eicher Motors) gained domestic volume market share Yo,Y while Bajaj Auto likely lost.
Stocks to buy, sell or hold
Ghawalkar of Share.Market said that challenges such as a slower PV growth outlook and regulatory uncertainties in the electric bus space remain, notwithstanding industry fundamentals looking strong.
Maruti Suzuki
– Nuvama has a buy rating on the stock with target price of up to Rs 13,900
– Choice Broking has an ‘Add’ rating on the counter.
Tata Motors
– InCred has a ‘Reduce’ rating on the stock for a price target of Rs 642
– Motilal Oswal remains Neutral on the counter.
M&M: Buy | MOFSL | Target: Rs 3,482
Hyundai Motor | Buy | Target: Rs 2,050
Hero Moto | Buy | Nuvama/Jefferies/Bank of America/MOFSL | Target: Up to Rs 5,650
Bajaj Auto | Buy | Anand Rathi/Axis Securities | Target: Rs 9,890
MOFSL is Neutral on this stock.
TVS Motor
– HDFC Securities has an ‘Add’ rating on the stock
– Axis Securities has a ‘Hold’ rating for the price target of Rs 2,670
Eicher Motors | Sell | MOFSL | Target: Rs 4,649
MOFSL has a buy view on ancillary stocks like Apollo Tyres, CEAT, Endurance Technologies, Happy Forgings, CIE Automotive, Samvardh Motherson, Motherson Wiring and Tube Investments. Meanwhile, MOFSL has a sell recommendation on MRF.
(Data inputs by Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
