Passenger vehicle makers are expected to report 10-15 per cent YoY jump in auto sales for April, driven by healthy demand in utility vehicles (UVs). On the other hand, two-wheeler (2W) retails are expected to grow about 20 per cent YoY, aided by the low base of last year and nine days Navratras that were positive for 2W retails and contributed to
incremental growth of 10-15 per cent YoY. While MHCV volumes are seen declining in single digits, LCV volume growth is expected to remain flattish YoY, Motilal Oswal said while suggesting a subdued year-over-year growth of 1-3 per cent for tractor volumes.
“Strong double-digit YoY growth is likely for 2W wholesale volumes in April due to good demand (retail volumes up more than 30 per cent) and a favourable base (festival timing). PV volumes are likely to have grown at a healthy pace led by robust retail volumes (up more than 10 per cent). Meanwhile, CVs and tractors are expected to be broadly flattish, better than the previous month, owing to the fading of the high base. We are positive on the auto sector. Our preferred OEM picks are Hero MotoCorp, TVS Motor and Escorts Kubota,” said Anand Rathi.
Motilal Oswal said it is positive on the PV segment, which is expected to see better earnings growth, led by improved mix, which is in turn driven by outperformance in SUVs. While expected volume growth for the two-wheeler sector at high single digits is likely to be better than other segments, most of it seems already priced in the recent run-up of stocks, the brokerage said.
“Also, we expect CV demand to remain weak in the near term, closer to Elections, and then pick up pace from 2HFY25. Within auto OEMs, we like Maruti Suzuki India, Ashok Leyland, and Mahindra & Mahindra,” it said.
Nuvama said within 2Ws, it expects double-digit growth across OEMs owing to festive/marriage demand and outperformance is likely for mass-market OEMs such as Hero MotoCorp, TVS Motor Ltd and Bajaj Auto Ltd. Among PV OEMs, it expects growth—M&M shall outpace Tata Motors and Maruti Suzuki India, it said.
“In CVs, a marginal drop is likely due to purchase deferrals during elections. In tractors, we build in flat sales aided by festive demand despite weak sentiment in Maharashtra/south states,” it said.
This brokerge has Escorts, Bajaj Auto, M&M and Hero MotoCorp as its top picks from the auto sector.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
