May auto wholesale volumes steady, motorcycle sales up

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May auto wholesale volumes steady, motorcycle sales up

May's auto wholesale volumes were steady, with a sequential recovery witnessed across sectors. Rural demand recovery was visible, with motorcycle sales growth coming in ahead of scooter sales growth on month-on-month MoM basis. Export too staged a comeback and was up on MoM basis for most of the OEMs, they said.

ICICIdirect said Hero MotoCorp's growth in the two-wheeler market was driven by personal vehicle PV, Maruti Suzuki in personal vehicle PV space, Tata Motors in commercial vehicle CV sales and Escorts in the tractor sector. analysts were mostly positive on shares of Tata Motors and Ashok Leyland.

Maruti Suzuki's sales for the month rose 10.9 percent to 1.8 lakh units, up 10.9 percent from a year earlier. Tata Motors' total sales rose by 7.7 per cent to 74,973 units, up 7.7 per cent from a year earlier. Mahindra Mahindra's automotive sector volumes grew 1.4 per cent MoM to 61,415 units. For Ashok Leyland, volumes were up 1.2 per cent MoM at 13,134 units and was led by M&HCV segment.

Hero MotoCorp, a two-wheeler manufacturer, led the volume recovery with total volume up 31 per cent MoM to 5.2 lakh units. Bajaj Auto's MoM rose to 7.2 per cent at 3.6 lakh units. Exports rose 7.1 percent, while domestic sales rose 7.1 percent for Bajaj Auto. TVS Motors' two-wheeler sales rose 8.3 per cent to 3.2 lakh units. MoM sales were generally flat, with sales of its three-wheeler vehicles being largely flat.

ICICIdirect said chip supplies remained to limit the production ramp-up in the PV market despite healthy orderbooks across the region. In the CV space, growth at the industry leader was encouraging amid guidance for YoY decline in Q 1 FY 24 tracking high base of last year pre-buying witnessed in Q 4 FY 23. In the tractor space, numbers were a mixed bag amid guidance of low single-digit growth in FY 24 E.

within OEMs, Nomura India prefers Mahindra Mahindra, Ashok Leyland, Tata Motors and Bajaj Auto. The company said industry wholesale volumes for the PV market were ahead of its estimates, while medium-heavy commercial vehicles and two-wheeler wholesales were largely in line.

Motilal Oswal Securities said it prefers CVs over other sectors due to strong demand and a stable competitive environment. We prioritize companies that have greater visibility in terms of demand recovery, a strong competitive position, encouraging margin drivers, and a robust balance sheet. Tata Motors and Ashok Leyland are among the top OEM picks for the broker.

Anand Rathi has remained positive on the auto sector and has recommended Tata Motors, Eicher Motors and Hero MotoCorp as its preferred picks.

wholesales in the PV sector are likely to be a function of further normalization of supplies and response to recent model launches. Rural sentiments remain influenced by the demand for two-wheelers. CV operators are relying on steady freight rates to support their businesses. However, rising interest rates remain a key deterrent. We expect CV volumes to be supported by demand from infra construction sectors, JM Financial said.