Are you stuck in traffic again? While it feels frustrating, it’s also a sign of India’s booming automobile industry, one of the largest automobile manufacturers. The sector fuels millions of dreams and drives economic growth, be it passenger vehicles or commercial vehicles.

But what’s driving this growth?

The key factors fueling this automotive boom are rising disposable incomes, strong demand for passenger and commercial vehicles, and increasing government focus on the expansion of the electric vehicle ecosystem and infrastructure development.

Curious about the numbers?

Here’s a breakdown of the number of automobiles produced in India between FY18 to FY23:

YearNumber of Automobiles Produced (in mn)
FY 1829.1
FY 1930.9
FY 2026.4
FY 2122.7
FY 2222.9
FY 2325.9

How Did This Impact Auto Stocks?

Nifty Auto gave a 47.6% return in 2023, outperforming Nifty 50. This stellar performance has put several auto stocks in the spotlight. Stay tuned as we explore some of these popular auto stocks. 

List of Popular Nifty Auto Stocks 

Here is a rundown of Nifty Auto stocks, with details on their market capitalization and stock prices.

Nifty Auto StocksSub-SegmentsMarket Capitalization (in Cr)Stock Price (closing of 14th Feb 2024)
Ashok Leyland Ltd.Auto Ancillary₹ 50,780₹ 173.20
Bajaj Auto Ltd.2/3 Wheelers₹ 2,20,451₹ 7,720.40
Balkrishna Industries Ltd.Auto Ancillary₹ 44,765₹ 2,351.05
Bharat Forge Ltd.Auto Ancillary₹ 52,656₹ 1,105.10
Bosch Ltd.Auto Ancillary₹ 73,414₹ 27,399.55
Eicher Motors Ltd.2 Wheelers and Commercial Vehicles ₹ 1,05,517₹ 3,896.75
Hero MotoCorp Ltd.2 Wheelers₹ 94,859₹ 4,825.00
MRF Ltd.Auto Ancillary ₹ 58,138₹ 1,47,074.70
Mahindra & Mahindra Ltd.2/4 Wheelers₹ 2,04,735₹ 1,657.05
Maruti Suzuki India Ltd.4 Wheelers₹ 3,39,382₹ 11,027.95
Samvardhana Motherson International Ltd.Auto Ancillary₹ 78,234₹ 114.05
Sona BLW Precision Forgings Ltd.Auto Ancillary₹ 34,213₹ 606.30
TVS Motor Company Ltd.2 Wheelers₹ 97,120₹ 2,087.95
Tata Motors Ltd.4 Wheelers and Commercial Vehicles ₹ 3,01,386₹ 918.30
Tube Investments of India Ltd.Bicycles₹ 66,893₹ 3,497.10

Note: The above auto stock data is from February 14, 2024. For the latest updates on stock prices and market trends, check out the share.market stocks page today!

Key Considerations Before Investing in Automobile Stocks in India  

Use these parameters to access auto stocks:

  • Analyse the Company’s Financial Health

Check if auto companies have too much debt. When a company has too much debt on its books, there is a good chance that the company can’t pay back what they owe or when they default on its loans.  

This causes the auto stock prices to drop, and investors are left with stocks of an insolvent company.

  • Understand that the Auto Sector is Cyclical in Nature

Auto companies exhibit cyclical patterns due to their sensitivity to economic conditions. Demand for cars rises in economic upturns but declines during downturns. 

Factors like fuel prices and consumer confidence further influence the cyclicality, making the industry responsive to broader economic fluctuations.

Check if the company has strong plans to handle these downturns. 

  • Look for Companies with Clear Long-Term Growth Plans

Look for auto companies with clear plans on how they intend to grow in the future and their expected annual sales.

Check if the auto companies have visible growth plans and if they can come out stronger from downturns. 

Check: Factor Analysis of Nifty Mobility Stocks

Conclusion

In conclusion, India’s flourishing automobile industry, a major player in global manufacturing, thrives on rising incomes and government focus on electric vehicles. Before investing, analyze financial health, acknowledge the cyclical nature, and prioritize companies with clear long-term growth plans. 

Stay disciplined, avoid hasty tips, and adjust your portfolio sensibly. In the ever-changing auto sector, strategic and well-researched investments are crucial to building a portfolio that best fits your financial goals.

FAQs

What are Auto Stocks?

Stocks of companies involved in the design, manufacturing, and sale of automobiles, including passenger vehicles, two-wheelers, commercial vehicles, and related components.

Are there any risks associated with investing in auto stocks?

The industry is cyclical, so downturns can lead to stock price declines. Increased competition, regulatory changes, and raw material price fluctuations can also pose risks.

Where can I get more information about auto stocks?

You can find more information about auto stocks from financial news websites, company reports, and reputable financial publications.