Nifty Auto Index Climbs 1.2% on Festive Demand and Strong Q2 Earnings Momentum

India’s Nifty Auto Index (.NIFTYAUTO) rose 1.2% on October 16, 2025, driven by robust Q2 earnings, festive season demand, and upbeat investor sentiment. Gains in Mahindra & Mahindra, Tata Motors, and Bajaj Auto led the rally, reflecting optimism around retail sales, export orders, and easing input cost pressures.

India’s auto sector continued its upward momentum as the Nifty Auto Index surged 1.2%, outperforming broader market benchmarks. The rally was fueled by strong quarterly results, festive season demand, and positive outlooks from leading automakers, signaling resilience in both domestic and export markets.

Major Takeaways:

Index Performance: The Nifty Auto Index rose 1.2% intraday, with notable gains in Mahindra & Mahindra, Tata Motors, Bajaj Auto, and Eicher Motors. The index touched a high of 19,840, reflecting bullish sentiment across the sector.

Festive Demand Boost: Auto dealers reported higher footfall and booking volumes during Navratri and Dussehra, especially for SUVs, two-wheelers, and electric vehicles, indicating strong retail momentum ahead of Diwali.

Q2 Earnings Strength: Mahindra & Mahindra posted a 28% YoY increase in net profit, while Tata Motors reported record EV sales and margin expansion. Bajaj Auto saw double-digit growth in exports, particularly to Latin America and Africa.

Input Cost Relief: Declining prices of steel, aluminum, and rubber have helped automakers improve margins, with several companies revising their cost guidance upward for FY26.

EV Segment Growth: The electric vehicle sub-segment saw increased investor interest, with Hero Electric and Tata Motors EV division gaining traction due to government incentives and rising consumer adoption.

Brokerage Sentiment: Analysts at ICICI Securities and Motilal Oswal upgraded their outlook on the auto sector, citing strong fundamentals, festive tailwinds, and favorable policy support.

Notable Updates:

The Nifty Auto Index has gained over 9% in the past month, reversing its Q1 underperformance.

Automakers are ramping up inventory and dealer incentives to capture festive demand, with new launches expected in the compact SUV and premium bike segments.

With solid earnings, festive momentum, and easing cost pressures, India’s auto sector is steering into a high-growth phase, making it a key focus for investors this quarter.

Sources: 1. DD India – Market Update 2. Moneycontrol – Sectoral Indices 3. ET Now – Market Trends

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