A couple of brokerages have picked their auto plays ahead of November sales data. Some common auto picks include Maruti Suzuki, Ashok Leyland and TVS Motor.
Motilal Oswal said Maruti Suzuki and Ashok Leyland are its preferred auto picks. Emkay Global prefers Maruti Suzuki, Ashok Leyland, Mahindra & Mahindra (M&M), TVS Motor and Escorts. For JM Financial, Maruti remains a preferred pick in the passenger (PV) segment, owing to strong order book and new product pipeline. In the two-wheeler segment, this brokerage prefers Eicher Motors and TVS Motor.
Nomura India, meanwhile, said it prefer OEMs with strong model cycles driving market share gains, such as M&M, TVS Motor and Ashok Leyland.
The retail demand for two-wheelers was reasonable in November, but wholesale growth remains relatively lower due to the de-stocking after the festive season, analysts said. In the passenger vehicle (PV) segment, said Motilal Oswal, demand remained largely unaffected for the premium segment and muted for lower-end vehicles.
“The rise in interest rates has influenced overall CV demand, with flattish Retail sales MoM. However, the overall demand sentiment appears positive as fleet utilisation is still over 75 per cent. In Tractors, the sales momentum seems normal after the festive season as volumes grew 3-5 per cent YoY in North and Central India, while it was largely flat YoY in the South,” it said.
Nomura expects Maruti Suzuki’s domestic PV wholesales to be up 23 per cent YoY. It estimates industry wholesales of 3,27,000 units, implying 41 per cent market share for Maruti Suzuki.
“CV demand has seen softness in some pockets, but we estimate Ashok Leyland to gain market share in MHCVs. We expect volumes of Ashok Leyland, Tata Motors and Eicher Motors to grow at 52 per cent, 13 per cent and 38 per cent YoY,” Nomura said.
In case of two-wheelers, Emkay Global said its channel checks indicate that urban demand is better than rural and scooters are doing well in comparison to motorcycles. We expect domestic volumes to improve by 41 per cent YoY for Eicher Motors (Royal Enfield), 12 per cent for TVS Motor, 11 per cent for Hero MotoCorp and 10 per cent for Bajaj Auto.
“EIM-RE remains an outperformer on account of large pending order book for Hunter motorcycle,” it said.
In case of tractor makers, Emkay said tractor industryтАЩs volumes are likely to marginally decline on account of inventory de-stocking with dealers. “We expect a decline of 2 per cent YoY for M&M and flat performance for Escorts in domestic volumes,” it said.
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