Auto Sector Update : Nov 2025 auto sales volume performance by InCred Equities
Autos
Nov 2025 auto sales volume performance
* Nov 2025 volume eased from its festive season peak of Oct, while the low base benefit provided strong growth in 3Ws and tractors. CV turnaround sustains.
* For volume surprise, we prefer Hero MotoCorp, Maruti Suzuki, and Tata Motors CV. Profit drivers are strong for Bajaj Auto, M&M, and Ashok Leyland.
* With Nifty auto sector forward P/E valuation just above the 10-year mean, we maintain Overweight rating. OEMs preferred over auto-component makers.
Nov 2025 sales volume highlights
* YoY growth leaders/laggards: Leaders were Hero MotoCorp (+32%), Ashok Leyland (+29%), Tata Motors Commercial Vehicles (+28%), TVS Motor Company (+28%), Tata Motors Passenger Vehicles (+28%), Maruti Suzuki (+26%), and Eicher Motors (+23%). Laggards were Hyundai Motor India (+9%) and Bajaj Auto (+8%).
* MoM growth leaders/laggards: Post-festive season, a decline see across OEMs, with major ones being Escorts Kubota (-44%), Mahindra & Mahindra or M&M (-29%), Eicher Motors (-19%), and Bajaj Auto (+13%).
* Beat vs. our expectations: Ashok Leyland (+15%), Tata Passenger Vehicles (+12%), TVS Motor Company (+8%), and Hero MotoCorp (+6%).
* Miss vs. expectations: Tata Motors Commercial Vehicles (-11%), Hyundai Motor India (-8%), & Eicher Motors (-6%).
* Vahan retail sales: Nov 2025 yoy retail performance was led by tractors (+57%), ahead of cars (+29%) and electric vehicles or EVs (+12%). Two-wheelers or 2Ws, however, saw a 4% decline. MoM trends reflected typical post-festive season moderation across most categories, with tractors being the exception, (+78%). As regards market share, Tata Motors trucks, M&M tractors and Hero MotoCorp 2Ws strengthened their positions, while Maruti Suzuki (cars) lost market share.
Cyclical demand recovery in play; maintain Overweight stance
* After a sharp rally in Nifty Auto Index, post Goods and Services Tax (GST) rate cut in Aug-Sep 2025 (9%), it took a breather in recent months to underperform. The last one month witnessed sharp returns for select stocks like Ashok Leyland (ADD), Bharat Forge (HOLD), Samvardhana Motherson International or SAMIL (ADD), & Apollo Tyres (ADD).
* Nov 2025 volume beat favors our ADD rating on Ashok Leyland and Hero MotoCorp. The volume miss favours our REDUCE rating on Hyundai Motor India.
* We feel macroeconomic stimulus measures like income-tax rate reduction, interest rate cut and Pay Commission salary revision will drive a two-to-three-year demand cycle recovery and therefore we reiterate our Overweight rating for the sector, as forward P/E valuation is just above the 10-year mean level. In the car segment, we prefer Maruti Suzuki, and M&M over Hyundai Motor India. In 2Ws, we prefer Hero MotoCorp and Bajaj Auto over Eicher Motors and TVS Motor Company.
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