As per our channel check, the sales momentum in Commercial Vehicles (CV) is likely to continue in March 2022. Passenger vehicle (PV) industry volumes are expected to be marginally lower than last year due to supply constraints. Brokerage and research firm Emkay said 2-wheelers and tractors especially are likely to decline due to easing client sentiment and higher base effect.
The brokerage house has retained its positive outlook on the auto sector, based on expectations of a cyclical upswing over the next three years. it likes Tata Motors (TTMT), Ashok Leyland (AL), Maruti Suzuki (MSIL) and TVS Motors (TVSL). Among subsidiaries, MK said it likes Motherson Sumi (MSUMI) and Bharat Forge (BHFC).
“The volumes of the CV industry are likely to improve due to improved chip supply for LCVs and better demand for ICVs/tippers. We expect domestic volumes to grow 20% annually for M&M, 3% for TTMT and 2% for AL. In comparison, we expect a decline of 4% for EIM-VECV,” the note said.
PV industry volumes should be slightly lower than last year due to supply constraints. Among Original Equipment Manufacturers (OEMs), we anticipate domestic volumes to grow by 44% year-on-year for MM and 35% for TTMT, while we expect a decline of 11% for MSIL . The brokerage said the discounts are lower as compared to last year in view of the strong order book.
Further, “2W industry volumes are expected to remain significantly lower than last year, owing to muted customer sentiments and higher base impact. Also, the chip shortage has affected the dispatch of premium motorcycles. We expect domestic volumes to decline by 4% annually for TVSL, 5% for EIM-RE, 34% for BJAUT and 35% for HMCL,” said Emkay’s note.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
download
The app will get 14 days of unlimited access to Mint Premium absolutely free!