Nifty Auto Index Hits Significant Milestone of 22,000; Tata Motors Top Performer in FY24

On the very first day of the week, the Indian market started positively, with significant bullish sentiment prevailing across the market. Major indices such as the Nifty and Sensex traded in the green, reaching their respective all-time high levels. Another notable index, the Nifty Auto, traded in uncharted territory or the blue-sky zone. Today, the Nifty Auto Index hit a significant level of 22,000 for the first time ever.

In this article, we are going to analyze the Nifty Auto Index along with a brief overview of auto sales numbers in Q4 and FY24.

Nifty Auto Index

The Nifty Auto Index opened the day at 21,662.15, reached a high of 22,102.05, and a low of 21,642.90 during intraday trading. Today, it reached a significant milestone of 22,000 for the first time ever. As of the time of writing the article, it is trading around 22,085.90 levels, up approximately 480 points or 2.23% compared to Friday’s closing levels.

After consolidating for almost five days last week within a narrow range, it broke out today, forming a significant green bar on the chart.

Back in 2020, the index hit a low of 4452.20 on Mar 24, 2020, from a peak of 12108.80, representing a 63% fall from its peak levels of 20 Dec 2017. However, it crossed these peak levels on July 08, 2022, which represented a 176% rally. It then traded in a range for around 300 days after breaking out from the range on May 08, 2023, and subsequently started rallying towards the upside. It rallied around 65% from the breakout of range and reached a significant milestone of 22,000 levels today.

Turning our attention to the returns it provided in the past period, the Nifty Auto Index has delivered impressive returns of around 75% in FY24.

Daily Chart:

Top Performing Auto Stocks in FY24

Tata Motors, among the auto stocks in the Nifty Auto Index, emerged as the top-performing stock by delivering around 136% in FY24. The second-best performer belongs to the two-wheeler space category, where Bajaj Auto delivered around 135% returns during the same period. The least-performing stock in the Nifty Auto space is Balkrishna Industries, a prominent player in the tyre industry, which delivered around 19% returns during the same period.

Auto Sales by FADA:

Auto retails in March registered a growth of 3.14% on a year-on-year basis, even as passenger vehicles, commercial vehicles, and tractors saw a decline, the Federation of Automobile Dealers Associations (FADA) said on Monday.

With the expiration of the FAME-II subsidy on March 31, e-2W sales rose, with the category seeing a market share bump to 9.12% for the first time ever.

The auto retail sector grew by 10% in FY24, with two-wheelers, three-wheelers, passenger vehicles (PVs), tractors, and commercial vehicles (CVs) recording growth rates of 9%, 49%, 8.45%, 8%, and 5% respectively. According to FADA, three-wheelers, passenger vehicles, and tractors set record highs in FY24.

Conclusion:

In conclusion, the Nifty Auto Index has reached a significant milestone reflecting the resilience and growth potential of the auto sector. Tata Motors emerged as the top performer, showcasing remarkable returns of 136% in FY24. Bajaj Auto followed closely with a robust performance in the two-wheeler category. Despite challenges, such as declining sales in certain segments and the expiration of subsidies, the auto retail sector saw an overall growth of 10% in FY24. Looking ahead, record highs in certain segments and ongoing innovations in electric vehicles highlight promising opportunities for the Indian auto industry.