Indian auto stocks rallied on Tuesday, lifting the Nifty Auto index by 1.5 per cent to 23,732.45, led by strong gains in Hero MotoCorp, TVS Motor, and Samvardhana Motherson International. The market momentum coincided with the release of quarterly data by the Society of Indian Automobile Manufacturers (SIAM), which showed record-high Q1 exports in both the passenger vehicle (PV) and two-wheeler categories, even as domestic sales moderated.

Among key performers, Hero MotoCorp jumped 4 per cent, extending gains after its recent global expansion announcement. Samvardhana Motherson International advanced 4.68 per cent, while TVS Motor Company gained 3.06 per cent. Other notable gainers included Tube Investments of India (up 1.75 per cent), Bosch Ltd. (up 1.64 per cent), and Eicher Motors (up 0.89 per cent).

Meanwhile, Ashok Leyland declined 1.95 per cent, emerging as the session’s biggest loser.

In its Q1 FY26 report, SIAM noted that passenger vehicle exports rose 13.2 per cent to a record 2.04 lakh units. While export growth was robust, domestic PV sales fell 1.4 per cent year-on-year to 10.11 lakh units, largely due to weakness in the passenger car sub-segment.
Utility vehicles (UVs) continued to gain traction, rising 3.8 per cent and now accounting for 66 per cent of total PV sales.

The two-wheeler segment posted domestic sales of 46.74 lakh units, marking a 6.2 per cent decline from the same period last year. However, exports surged 23.2 per cent to 11.4 lakh units, with demand improving in Latin America, Africa, and South Asia. Retail registrations in India were up 5 per cent, supported by the marriage season and improved sentiment in rural markets.

Three-wheeler sales touched a record 1.65 lakh units in Q1 FY26, with marginal growth of 0.1 per cent on-year. Export performance remained strong, growing 34.4 per cent to 96,000 units, as demand increased for both passenger and cargo segments in international markets. Financing availability and steady intracity logistics demand supported the segment’s expansion.

Commercial vehicle sales in the domestic market were 2.23 lakh units, reflecting a slight 0.6 per cent decline from the year-ago period. However, exports rose 23.4 per cent, reaching approximately 20,000 units, aided by overseas infrastructure and transport requirements.

Looking to the second quarter, the auto industry is expected to benefit from multiple tailwinds. The festive season, an above-normal monsoon, and 100 basis points of cumulative RBI repo rate cuts over the past six months are likely to improve buyer sentiment and affordability. Entry-level vehicles and two-wheelers, which are sensitive to rural demand, stand to gain the most.

While domestic sales showed mixed trends in Q1, robust export growth and improving macro factors suggest a positive outlook for the Indian auto sector in the coming months.