Tale of the Tape 

Hi ya’ll. 

Markets extended their losses for a third day, with Nifty (-0.1%) and Sensex (-0.3%) ending in the red. Midcaps (+1.3%) and Smallcaps (+1.4%) built on their gains from yesterday. The advance-decline ratio was in favour of the bulls (4:1).

Most sectors ended in the green. Metals (+2%) and Energy (+1.8%) were the top gainers. NBFCs (-0.8%) witnessed the most selling pressure.

India’s automakers are forecasting single-digit volume growth for FY26. Read our top story on how to navigate the bumpy ride ahead.

Investec believes this steel tube stock could rally +29%. More details below.

Radico Khaitan, Rategain Travel and NHPC saw big moves today. Check out their charts below to find out why.

Brokerage reaction. Bajaj Finance (-1%) was in focus after UBS downgraded the stock to a sell; the brokerage sees a downside of -20% from current levels. Just Dial was up +6% after Nuvama upgraded the stock; it projects a +28% rally.

Maruti Suzuki fell -2% after cutting its FY30 India sales target. PS - the company has maintained its production target, betting on exports instead.

Vesuvius India (+5%) will consider a stock split on February 26.

Vedanta (+3%) received shareholder approval for its much-awaited demerger.

ITC (-1%) was in focus over reports of a potential GST hike on cigarettes

Auto
Speed Bumps

Is India’s auto sector staring at bumpy times ahead? Yes if you go by the industry’s projection of low single-digit volume growth for FY26. There’s a lot going on here, and not all of it is bad, so let’s get into it.

Recap time: Volume growth has been slowing for over a year now, from +27% YoY in FY23, to +8% in FY24. But, FY25 is projected for a even slower growth and FY26 is expected to see similar sluggishness. FYI - while Maruti and Hyundai project volumes of 1%-1.5%, Tata Motors sees up to 4% growth.

So what’s the problem? The biggest issue is that entry-level & hatchback car sales have dropped off a cliff. Weak wage growth + higher entry level prices was bad news for the segment. Some of this demand has moved onto SUVs, but realistically it hasn’t translated fully. As Maruti’s RC Bhargava put it: “The people who buy SUVs are just an extremely small segment of the consumers, and therefore, despite the strong growth in SUVs, the overall growth of the auto industry has come down.”

Then there’s the EV question. Tata and Mahindra have killed it, but the pie is still very small. That said, competition is going to HEAT up soon. Maruti will enter the fray, while JSW & Hyundai are already in the mix with new and facelift models lined up. And, of course big daddy Tesla is reportedly gearing up to launch in H2 2025. While this makes it tougher for incumbents, more EV offerings could help widen the pie which is a net positive!

Finally, there’s multiple macro global headwinds including the rupee depreciation and Trump’s auto tariffs (will hurt Indian component makers) which need to be monitored closely. 

Big Picture: It’s uncertain times for sure. But experts say don’t rule out a bounceback with interest rate & income tax cuts which could boost consumer sentiment.

Sponsored
New Fund Offer Alert! 🚨 

Bajaj Finserv Multi Cap Fund leverages contrarian investing to identify market overreactions—strategically investing in undervalued stocks and exiting when the entire value is realized.

*3rd Party Ad. Not an offer or recommendation by Stocktwits. See disclosure here.