Indian automakers’ May 2025 sales data, released on Monday, 2 June 2025, portrayed a mixed sentiment among stock market experts and brokerage firms. The passenger vehicle (PV) segment’s low growth and the booming export figures fueled the market outlook for auto stocks.
Indian automobile manufacturing companies reported weak sales to dealers in May 2025 due to muted urban demand, mainly in the small car segment.
India’s largest automaker, Maruti Suzuki, reported a 5.6% fall in domestic sales to 135,962 units in May 2025. The brand’s small car segment witnessed a 31% fall, for cars like the Alto and the S-Presso.
Hyundai Motor India reported an 11% fall in its May 2025 wholesale sales data, as the brand sold 43,861 units compared to 49,151 units in the same period a year ago. Tata Motors reported an 11% YoY drop in sales to 41,557 units.
When it comes to two-wheelers, market leader Hero MotoCorp posted a 2% YoY rise in sales for May 2025, while the second-largest firm, Bajaj Auto, recorded 1.6% growth.
TVS Motor reported a 14.1% year-on-year (YoY) jump in total sales to 309,287 units, due to strong demand for its electric vehicle offering.
PV volumes fall, Tractors in line
Indian brokerage firm Anand Rathi maintained a “Neutral” expectation for India’s auto sector stocks, citing the May 2025 sales performance. The tractor sales for May 2025 were in line with the brokerage estimates, and growth was mid-single digits due to support from unseasonal rainfall, an MSP hike, and healthy agricultural activities.
The two-wheeler sales were in line with the brokerage estimates. However, the passenger vehicle (PV) sales were ‘slightly below estimates’ due to a sluggish retail market trend.
“Ahead, rural markets, the monsoon, rabi output, cash-flow, better interest rates and higher disposable incomes thanks to tax cuts would maintain momentum,” said the auto sector analysts at Anand Rathi in a sector review report on Monday.
Rajesh Sinha, Senior Research Analyst at Bonanza, also recommended three stocks to buy for the long term: Mahindra & Mahindra, TVS Motor, and Maruti Suzuki. The analysts at Anand Rathi recommended buying Maruti Suzuki and Escorts Kubota.
Auto stocks to buy
1. Mahindra & Mahindra Ltd (M&M): Mahindra & Mahindra shares have given stock market investors more than 500% returns in the last five years, and over 18% in the last one-year period.
Rajesh Sinha recommended this stock, citing M&M’s position to excel in its core business operations, underpinned by a strong rural recovery and the introduction of new SUV and tractor models. The expert also said that the company’s export business witnessed a 37% year-on-year (YoY) growth, as the automaker now positions itself to launch three Internal Combustion Engine (ICE) SUVs, two Battery Electric Vehicles (BEV), and five Light Commercial Vehicles (LCVs) in CY26.
2. TVS Motor Ltd (TVSMOTOR): The shares of the two-wheeler automaker have given stock market investors more than 600% returns in the last five years and nearly 25% in the last one-year period.
The stock market expert highlighted the company’s sharp rise in electric two-wheeler sales and the board’s expectations of export growth due to high demand from the Latin American market and demand recovery in Sri Lanka and Africa. The management also expects a strong revival in rural demand in the near term, fueled by the upcoming May-June wedding season in India.
3. Maruti Suzuki India Ltd (MARUTI): Maruti Suzuki shares have given Indian stock market investors more than 110% returns in the last five years. However, the shares are down 2.52% in the last one-year period.
Sinha highlighted how the automaker’s total sales volume (Domestic + Exports) for the month rose to 1.8 lakh units. The company’s exports also saw an 80% YoY jump as it achieved its production milestone for the 2024-25 fiscal year.
Anand Rathi also recommended buying Maruti Suzuki shares after the May 2025 auto sales data release on Monday, 2 June 2025.
4. Escorts Kubota Ltd (ESCORTS): Escorts Kubota shares have given back investors over 230% in the last five years. However, the tractor manufacturer’s stock lost 16.91% in the last one-year period.
Like the other Indian automakers, Escorts Kubota’s export segment witnessed a 71% rise, even though the domestic volumes took a 2% hit. The core business revenue volumes from tractor sales witnessed a 1% YoY rise to 10,354 units, in line with Anand Rathi’s estimates for the month.
The brokerage recommended this stock as its stock pick after the May 2025 sales data release for stock market investors.
China threat
Sinha also highlighted how China’s rare-earth magnet export curbs pose a “significant risk” to the Indian auto industry.
He said that automakers are urging the government to expedite diplomatic negotiations and clearances with China while considering other suppliers from nations like Japan and Vietnam. The current restrictions pose a high threat to the production of ICE and EV vehicles in India.
“Urgent investment in domestic processing and R&D into alternative motor technologies is essential for long-term resilience,” he added.
Read all stories by Anubhav Mukherjee
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
