AUTO STOCKS RALLY UP TO 3% ON STRONG OCTOBER SALES

Shares of automobile manufacturers gained on November 2 after strong October sales numbers highlighted resilient consumer demand during the festive season. Analysts remained positive on the sector, particularly favouring two-wheeler and commercial vehicle manufacturers due to their stronger ability to pass on rising input costs through price increases. Maruti Suzuki shares climbed 3% apiece, while Ashok Leyland advanced 2.6%. Tata Motors Passenger Vehicles gained 2.8%, and TVS Motor Company rose 0.77%. October sales data indicated that automobile demand remained strong despite a high base created by last year's surge following GST rate cuts. However, analysts cautioned that the real test for the sector would come after the festive season, as higher commodity prices and potential supply constraints could affect growth momentum. Among individual companies, TVS Motor reported a 29% year-on-year increase in October sales, while Maruti Suzuki recorded its highest-ever monthly sales of 2,76,120 vehicles, marking 25% growth. Tata Motors' commercial vehicle sales increased 27%, while Ashok Leyland registered a 23% rise. However, the tractor segment continued to face pressure. Mahindra & Mahindra reported a 12% decline in total sales during October. Analysts highlighted the possibility of a challenging comparison base and rising input costs, although the company attributed the decline primarily to a shift in festive dates. Overall, strong festive-season sales have supported sentiment towards automobile stocks, but investors will closely monitor post-festive demand trends, commodity prices and manufacturers' pricing strategies in the coming months.