New Delhi, Feb. 27 -- Indian auto stocks have been under pressure, with the Nifty Auto index losing 7 per cent in February so far and showing a similar decline in 2025 YTD. While the Nifty Auto sector remained flat in January, it has been in a corrective phase since October 2024, shedding 21 per cent of its value. The downturn has been fueled by weak sales, slowing urban consumer demand, and contracting margins.

Adding to concerns, automakers expect a moderate performance in the financial year 2025-26, mirroring the current fiscal year's trend. Weakness in small car sales-driven by affordability challenges, easing pent-up demand, and a high base effect-has significantly impacted the sector's growth trajectory.

Additionally, external fac...