Auto index outperforms benchmark indices; here are the top 3 stocks with the highest YTD returns in 2024

In 2024, the Nifty Auto Index surged by 38% on a year-to-date basis (YTD), outperforming the benchmark NIFTY50’s 15.1% YTD return. What’s intriguing to note is the fact that all the constituents of the Nifty Auto index have delivered a positive return in 2024. Shares of M&M have climbed 64% in 2024, as a result, during the year, the market-cap of the company crossed the milestone of ₹ 3 lakh crore, while on Tuesday, the shares of Bajaj Auto hit a fresh record high.

Top 3 auto stocks with the highest YTD in 2024

Source: NSE data

Mahindra & Mahindra (M&M) Ltd (YTD return 64.42%)

The flagship Company of the Mahindra Group, offering a wide range of mobility products and farm solutions. Since 1947, it has expanded its offerings to include SUVs, pickups, commercial vehicles, tractors, electric vehicles, two-wheelers, gensets, and construction equipment.

In Q1FY25, revenue increased 12% YoY to ₹27,038.79 crore, net profit dropped to 5.3% YoY of ₹2,612.63 crore. The automaker recorded market share gains and continued margin expansion for both the Auto and Farm segments.

Investor’s buying interest is driven by strong SUV sales, EV focus, farm equipment performance, and successful new product launches. The SUV segment demand has moderated in Q1, with a fall in order booking, therefore SUV segment performance could see a moderation in sales in coming quarters. However, tractor and farm equipment segment is could drive overall volumes upwards.

Bajaj Auto Ltd (YTD return 56.88%)

Bajaj Auto is a leading homegrown motorcycle manufacturer and exporter, with a significant global presence. It holds the distinction of being the world's top manufacturer of three-wheelers which is engaged in the development and distribution of motorcycles, commercial vehicles, electric two-wheelers, and related parts.

In Q1FY25, net profit of the company grew 18% YoY to ₹1,965 crore and revenue grew 14% YoY to ₹11,793 crore. The improvement in Bajaj’s market share in the two-wheeler category in recent periods, decent sales and profit growth have attracted buying interest from investors in the counter.

The two-wheeler remains the best segment within Indian autos and its growth is anticipated to outpace passenger vehicles. In July, two-wheeler sales witnessed 17% MoM growth compared to 10.18% of PVs, as per FADA data, which underlines the fact that two-wheeler segment is poised for further growth.

Samvardhana Motherson International Ltd (YTD return 90.2%)

Earlier known as Motherson Sumi Systems, is a leading supplier to automotive OEMs. With a presence on five continents, the company serves customers in various other industries like Aerospace, Logistics, Health & Medical, and Information Technology, offering support for evolving industrial trends worldwide.

In Q1FY25, net profit of the company jumped 65% YoY to ₹994 crore and revenue increased 29% YoY to ₹28,868 crore.

The strong financial performance with the surge in profit and higher sales volume and the company’s capex planning gave investors confidence in the company’s future growth prospects and expansion.

Bottomline

Since the start of 2024, the Auto index consistently closed in the green every month, with June marking the highest single-month returns of the year. The sector's outperformance has been fueled by strong investor interest, driven by significant volume growth, robust market demand, and enhanced operational efficiency. Among the top performers, Samvardhana Motherson has surged 90%, M&M is up 64%, and Bajaj has gained 56%.