Auto shares today
Shares of automobiles and its related companies were under pressure with the Nifty Auto index falling 2 per cent on profit booking due to higher crude prices. In the past two trading days, the auto index has declined nearly 3 per cent. In April, the Nifty Auto index rallied 12 per cent till Tuesday, April 21, 2026.
At 11:44 AM; the Nifty Auto index quoted 2 per cent lower, as compared to 0.8 per cent decline in the Nifty 50.
TVS Motor Company, Ashok Leyland and Samvardhana Motherson International were down 4 per cent each on the National Stock Exchange (NSE) in Thursday’s intra-day trade. Mahindra & Mahindra (M&M), Hero MotoCorp, UNO Minda, Sona BLW Precision Forgings and Eicher Motors were down in the range of 2 per cent to 3 per cent.
Why are auto shares under pressure in the past two trading days?
Crude prices have surged, with Brent rising from $90.38/bbl last Friday to $101.91/bbl on April 22, 2026. The move is being driven by escalating tensions after Iranian gunboats fired near the Strait of Hormuz, reinforcing supply disruption risks. The standoff remains entrenched, with divisions centered on Iran’s nuclear program and Israel’s operations in Lebanon, said Choice Institutional Equities.
Provided there is sustained reopening of Strait of Hormuz by the end of April, the brokerage firm expects Brent price to average at $95/b for April-June 2026. In this scenario, we estimate the Brent price will average at $82/b for FY27.
In the most damaging scenario - where a prolonged stalemate leads to an extended standoff, such that sustained reopening of Strait of Hormuz is only by end of July - Brent could average $120/b in Apr–Jun’26, with FY27E averaging $98/b. We see this scenario to be least likely, it added.
While demand momentum has remained healthy in March 2026 quarter (Q4FY26), there are clear headwinds emerging for the sector given the ongoing geopolitical turmoil in West Asia, according to analysts at Motilal Oswal Financial Services Research.
While most of the large companies (both OEMs and ancillaries) are managing gas supplies at their end very well so far (as well as their supply chain), there is no certainty that they would continue to do so in the coming months if this situation persists, the brokerage firm said in automobiles sector report.
Beyond this, the most critical parameter to watch out for is the surge in input costs across all commodities in Q4FY26, which could materially impact earnings from Q1FY27 onward. Further, the surge in crude oil prices remains a key risk to India’s economic growth, which is likely to be detrimental for commercial vehicle (CV) outlook. Even freight costs have increased for export-focused companies, it added.
In these circumstances, companies with strong fundamentals, a healthy launch pipeline and the ability to outperform peers and/or are attractively valued will remain preferred bets, analysts said. ====================================== Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.