Key Trends in Indian Stock Market During February 2025

February 2025 saw several significant events influencing the Indian stock market. Here’s a breakdown of the key factors that shaped the market’s trajectory:

Jan 2025 Auto Sales

India’s automotive industry showed mixed results in January 2025. Passenger vehicle sales increased by 3%, while two-wheeler dispatches saw only a modest 1% year-over-year growth. This trend may be influenced by weak financing conditions in the two-wheeler market, as noted in a BNP Paribas research report.

The medium and heavy commercial vehicle (MHCV) segment returned to growth, up by 5%, while light commercial vehicles (LCV) grew by 2%. Tractor sales performed strongly with a 9% increase, though performance varied across manufacturers.

Maruti Suzuki continued to lead the market with total sales of 212,251 units, reflecting a 6.5% year-over-year growth, supported by a 13% increase in exports. Mahindra & Mahindra saw a 17.6% increase in utility vehicle sales, reaching 50,659 units, while Tata Motors reported a 10% decline in domestic passenger vehicle sales, totalling 48,056 units.

Union Budget 2025

The Union Budget for 2025 was announced in February, with Finance Minister Nirmala Sitharaman stating that total receipts, excluding borrowings, are estimated at ₹34.96 lakh crore, while total expenditure is projected at ₹50.65 lakh crore.

Under the new tax regime, no personal income tax will be payable for earnings up to ₹12 lakh annually (approximately ₹1 lakh per month, excluding special income like capital gains). For salaried taxpayers, the limit will be ₹12.75 lakh due to the ₹75,000 a standard deduction. This structure will significantly reduce the tax burden on the middle class, freeing up more disposable income, which is expected to boost household consumption, savings, and investment. The new Income-Tax Bill will be written in a clear and straightforward manner to simplify understanding for taxpayers and tax authorities, promoting tax certainty and reducing litigation.

RBI Monetary Policy Decision

In his first policy meeting as Governor of the Reserve Bank of India, Sanjay Malhotra announced a 25-basis point rate cut. This marks the first reduction in rates after 12 consecutive policy reviews by the Monetary Policy Committee. The repo rate has been reduced from 6.5% to 6.25%.

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