Published on 10/10/2017 5:43:38 PM | Source: IIFL Ltd
Auto Sector Update - IIFL
Strong volume performance
Post revised emission norms and GST rollout, Indian auto sector reported a strong volume performance. Advent of festive season and lower interest rates further buyed demand, particularly for passenger cars and two wheelers, backed by neew model launches, enthused rural buyers and high pent up demand in the system (as prices were expected to drop post GST rllout). Two-wheeler markers Eicher Motors (Royal Enfield), Hero Motocorp and TVS Motors reported robust performance while Bajaj Auto continued to underperform in domestic sales. However, Bajaj Auto did well on the export front with an overall growth of 6.5%. Maruti continued to outperform in the passenger vehicle segment, while performance of Tata Motors and M&M saw marked improvement. The commercial vehicle space sprung a surprise with M&HCV segment reporting more than 20% growth and LCV segment recording double digit growth. Ashok Leyland sustained its outperformance vis-a-vis industry leader Tata Motors. Reasonably good monsoons and higher MSPs boosted M&M trackor demand.
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