Nifty Auto Hits All-Time High On Exit Poll Euphoria, May Sales Report
Nifty Auto pared some of its gains to trade 2% higher at 24,041 as of 1:37 pm after opening at 52-week high of 24,159 on Monday.
Automobile stocks were active on Monday, driven by May sales reports and optimism from exit polls forecasting the continuation of the National Democratic Alliance government for a third term.
Nifty Auto index pared some of its gains after opening at 52-week high of 24,159. It is up 2% at 24,041 as of 1:37 pm. Leading the gains were Mahindra & Mahindra Ltd., up 5.46%, Ashok Leyland Ltd., up 5.74%, and Bajaj Auto Ltd., up 3.40%.
India's carmakers including Hyundai India and Tata Motors have grown in low single digits in May amid inflating inventory, while Maruti Suzuki's sales declined.
However, sales figure also showed pockets of growth—led by Mahindra & Mahindra, Ashok Leyland, and VE Commercial Vehicles—with divergent trends within segments.
In two wheelers, TVS Motors Co. saw the biggest sales growth of 12%, compared to the same time last year. While, Bajaj Auto Ltd. reported flat volumes, Hero MotoCorp Ltd. and Eicher Motors Ltd. sales fell 4% and 8%, respectively.
Passenger vehicle segment sales increased, with M&M seeing a 31% rise. Tata Motors Ltd. saw single digit growth of 4%.
Maruti Suzuki India Ltd. reported a 2% drop in sales due to a delay in export shipments. The new Swift recorded 40,000 bookings, the car maker said in its press conference.
M&M has been on a strong growth path with the new launch of the 3XO and multiple launches planned for this year.
Within commercial vehicles, there was a key divergence with Tata Motors, showing slow growth, but the other two players saw good growth. Ashok Leyland continued its momentum in both the medium, heavy, and light commercial vehicle segments, growing 12% year-on-year.
VE Commercial Vehicles Ltd. was a surprise, as it reported sales growth of 9% during the month, against an expectation of an 11% fall. This was led by 16% growth in HD trucks greater than 18.5 tonne.
Finally, another divergent trend emerged in the tractor makers sector. The M&M Farm Equipment segment grew 8%, with exports growing 85%. However, they still represent a minor portion of the total sales.
On the other hand, Escorts Kubota Ltd. saw a 6% fall in sales, which was expected. Post-fourth quarter results, the company had mentioned some friction in sales in Maharashtra and Karnataka and is now focusing on the western region, which contributes roughly 20% of industry volumes.
