Emkay Global expects personal vehicle (PV) industry growth at 15 per cent, with Tata Motors’ domestic volumes soaring 101 per cent and Mahindra & Mahindra’s 29 per cent on a low base, thanks supply issues a year-ago. The brokerage pegs Maruti’s sales growth at 7 per cent.
Maruti Suzuki is seen to report a further fall in market share to to 47.5 per cent in February compared with 49 per cent in December quarter and 53 per cent in February last year, Nomura India said.
In case of two-wheelers, Emkay expects a mixed bag, with volume growth for TVS likely at 9 per cent, Eicher Motors’ Royal Enfield’s at 8 per cent and Bajaj Auto’s at 4 per cent. Hero MotoCorp is seen reporting a negative 4 per cent growth in sales.
In the tractor segment, domestic volumes are seen growing 28 per cent for Mahindra & Mahindra and 27 per cent for Escorts. In the commercial vehicle segment, domestic commercial vehicle volumes are expected to grow at 22 per cent for Ashok Leyland and 9 per cent for Tata Motors, while decline of 9 per cent for M&M due to supply issues.
“MHCV demand has been improving on strong Tipper/ICV demand and a gradual recovery in replacement demand as well,” Emkay said.
Nomura India said that its commodity cost index is up 350 basis points compared with the December quarter for both personal vehicles and two-wheelers. It noted that while auto prices increased 2 per cent in January, they were insufficient and margin pressures are likely to be higher for auto companies in the March quarter.
“M&M remains our top pick in the sector due to its: higher rural exposure (where recovery is faster), initiatives to address capital allocation concerns, and attractive valuations. We also like Ashok Leyland, given the cyclical uptick in MHCV cycle. Among suppliers, we prefer Motherson Sumi, and Minda for their strong OE demand recovery and higher content per vehicle,” Nomura India said.
