- Auto retail sales grew 14-36% YoY in September, aided by a weak base effect
- Top picks include TVS Motor and Hyundai Motor India, per Macquarie
- Electric vehicle penetration hit record levels in two-wheelers and passenger cars
Auto sales remained broadly healthy through September, with the retail segment clocking a 14-36% year-on-year growth across segments. The sales were aided by a weak year-on-year base, brokerages such as CLSA, Jefferies noted.
Top picks for the season include TVS Motor Company Ltd. and Hyundai Motor India Ltd., according to Macquarie. Others who beat street expectations for sale include Maruti Suzuki India Ltd. and Hero MotoCorp Ltd.
Electriv Vehicle adoption continues to accelerate, with record penetration in both two-wheelers and passenger vehicles, Macquarie outlined. The brokerage added that trends for all three segments (PV, 2W, and CV) remain strong.
On the other hand, tractor volumes and sells for Mahindra and Mahindra and Escorts Kubota came in weak as they were dragged down by El Nino implications. Companies like Mahindra and Mahindra Ltd., Bajaj Auto Ltd. and Tata Motors Ltd. fell short of estimates.
The overall sales also got a boost from pre-festive channel stocking, and a key test for the industry lies in the upcoming high-base festive season. Festive demand from October 11 is the key monitorable, Jefferies stated.
The brokerage highlighted that the industry us entering a high-base period, and sustaining festive demand will be crucial for auto stocks. CLSA sees volume growth for the fiscal in high-single to low-double digits.
However, commodity cost pressures remain a key concern, both Macquarie and CLSA underlined. Commodity cost strains have deepened because of the on-going West Asia conflict.
Auto Sales Recap
Indian auto companies reported a mixed set of monthly sales numbers, with passenger vehicle and commercial vehicle makers largely posting strong year-on-year growth, while tractor manufacturers faced pressure. Maruti Suzuki, Hyundai Motor India, Tata Motors, Ashok Leyland, TVS Motor and Eicher Motors reported robust sales growth, with several companies either meeting or surpassing Street estimates.
In contrast, Bajaj Auto's overall sales growth lagged expectations due to weakness in domestic two-wheeler demand, while Escorts Kubota and Mahindra's tractor business reported a decline in sales amid a softer rural demand environment. Exports remained a bright spot for several manufacturers, particularly Bajaj Auto, TVS Motor and Mahindra's tractor division. Here are the detailed September auto sales numbers.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.