Auto stocks in top gear: What's driving the rally? Experts recommend 10 stocks to buy from the sector

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Exide Industries, Tata Motors DVR and Bharat Forge skyrocketing about 100-140 per cent.Out of 16 components in the index, as many as nine stocks have surged over 75 per cent in the last one year, according to Trendlyne data.Expectations of robust sales in FY25 are among the biggest factors boosting automobile stocks. A revival in the rural market has driven this surge, as forecasts of a normal monsoon and stable raw material prices promise healthy margins.Experts believe the two-wheeler market may outshine the passenger and commercial vehicle segments in volume growth.Also Read: Lok Sabha elections 2024 trading: Kripashankar Maurya of Choice Broking recommends buying these 7 stocks for short termAtul Parakh, the CEO of Bigul pointed out that automobile stocks have surged due to strong demand fueled by economic reopening, consumer spending shifts post-pandemic, and the transition to electric vehicles (EVs).

While some frothiness exists, there could be more upside if supply chain constraints ease and EV adoption accelerates with new models/incentives in the automobile sector.Pravesh Gour, a senior technical analyst at Swastika Investmart, believes a strong Indian economy translates into higher spending power, which drives the auto, banking, and real estate sectors. This is because people with greater incomes spend more on bikes and vehicles.Gour pointed out that vehicle sales have increased during the past year in every category, including tractors and two-wheelers.