$MARUTI

Auto stocks erased early losses to trade higher on Tuesday, supported by value buying and stock-specific gains after a sharp sell-off at the start of the session. The Nifty Auto index, one of the worst-performing sectoral gauges in early trade, slipped as much as 1.3 percent to 26,067.70 after the Delhi government unveiled a new electric vehicle (EV) policy. The index had already fallen more than 2 percent in the previous session. The sector came under pressure after the Delhi government proposed allowing only electric three-wheelers to be registered from January 1, 2027, and only electric two-wheelers from April 1, 2028, accelerating the transition away from internal combustion engine (ICE) vehicles. However, sentiment improved as investors accumulated select auto stocks. Maruti Suzuki India emerged as the top gainer, rallying as much as 5 percent after Jefferies upgraded the stock to "Buy" and raised its target price to Rs 16,500, citing improving demand prospects and easing cost pressures. Tata Motors Passenger Vehicles and Exide Industries also gained 2.1 percent and 1.28 percent, respectively. The auto sector has largely remained in a consolidation phase over the past few months, with investors increasingly favouring stock-specific opportunities. While the Nifty Auto index is yet to confirm a decisive breakout, stocks backed by strong price and volume momentum could continue to outperform in the near term.