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ICICi Direct Report
The auto industry recorded a credible recovery in Q2 FY21, with manufacturing and distribution activities sustaining an upswing in each successive month during the period.
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Rural and semi-urban India continued to lead the charge amid healthy sentiment and cash flows courtesy lower Covid-19 incidence, normal monsoon progress, strong Kharif sowing and ongoing policy support for farm incomes and rural infrastructure.
The revival was most visible in discretionary pockets i.e. two-wheelers, tractors and passenger vehicles, with commercial vehicles (particularly buses) and three-wheelers still lagging the overall industry.
A strong showing in August and September, in particular, was partly due to an element of inventory build-up ahead of the upcoming festive period.
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