Waning Demand Expected to Hit Breakneck Rally in India's Auto Stocks

• A sizzling rally in India’s auto shares is reversing as unsold vehicles and growing discounts pressure profit margins.
• India’s NSE Nifty Auto Index is down 4.1% in August, more than double the decline in the Nifty 50 Index.
• Passenger vehicle inventories have surged to historic highs, and waiting periods for some models have nearly vanished.
• Increased competition among carmakers has led to price cuts, raising concerns about sustaining robust sales post-pandemic.
• The market’s next test will be during the festival season, but expectations for a major turnaround are low.

Source: Business Standard