Auto Sector Sees Mixed Growth in September; Tractors Shine

India’s auto sector recorded a mixed performance in September, with tractors emerging as the top performer, growing 50% YoY, led by strong demand and favorable monsoon conditions. Mahindra & Mahindra sold ~64,900 tractors (up 50%), while Escorts Kubota reported a 49% rise to 17,800 units. Other segments showed solid growth: Passenger vehicles: 11.5% Two-wheelers: 11.5% Commercial vehicles: 14% The recent GST cut (effective Sept 22) boosted festive demand—two-wheeler and car registrations surged 27% and 42% respectively during early Navratri days. Electric vehicle adoption hit record levels, with e-2W penetration at 8.1% and e-4W at 5.1%, signaling a shift toward electrification. While analysts expect continued momentum through Diwali, sustainability post-festive season remains uncertain. Brokers have recommended stocks like Maruti, M&M, Eicher, and TVS, but caution on elevated valuations. The sector’s performance reflects the combined impact of policy changes, seasonal trends, and evolving consumer preferences.