More Stories

Informist, Friday, Aug 16, 2024

MUMBAI - Two-wheeler companies are expected to benefit from improvement in rural demand going ahead, even as passenger vehicle makers are seeing a slump in demand. Owing to this, the movement of shares of companies from these segments will be mixed next week, with demand trends and valuations driving stock prices.

"Passenger vehicles are definitely seeing a slowdown in demand with inventory levels on the rise," a research analyst with a top brokerage house said. "A part of the reason for muted growth in volumes in the segment is also the high base of last year...this weakness may stay for one-two years," the analyst said. According to the latest data from the Society of Indian Automobile Manufacturers this week, passenger vehicle sales in July fell 2.5% on year to 341,510 units in India.

Discounts on cars have doubled from August last year and these are likely to stay high throughout the festival season till the end of December due to a pile up of inventory because of slowing sales, The Economic Times Newspaper reported today, citing trade insiders.

Analysts said a higher number of launches may help passenger vehicle-makers recover from the slump. Shares of Mahindra & Mahindra rose nearly 3.5% today after it launched the new Thar Roxx at a starting price of 1.29 mln rupees for the base petrol model.

"We appreciate the consistency with which Mahindra & Mahindra has come out with successful launches. Every single launch, even the facelifts and variants show a lot of effort to innovate and further improve the product appeal and raise the bar," Nomura said in a research report today. The brokerage added that the new Thar Roxx is not merely an extension of the three-door Thar, but it has substantially improved in many areas.

Two-wheelers are likely to see more broad-based growth amid the upcoming festival season and as rural demand shows signs of pickup, analysts said. Hero MotoCorp was among the major two-wheeler companies that reported its earnings this week. "Volume growth has been healthy so far in Q1 (Apr-Jun) and the company is preparing itself for an anticipated strong festive season going ahead on the back of improving rural sentiment," Motilal Oswal Financial Services said in a note post-earnings.

On Tuesday, Hero MotoCorp said it earned a net profit of 11.23 bln rupees in Apr-Jun, up 36.1% from 8.25 bln rupees in the year-ago period. The company's revenue from operations rose 15.7% on year to 101.44 bln rupees.

TOP HEADLINES
* PRESS: Car discounts double over last year as inventory piles up
* M&M unveils new Thar Roxx, car price starts at 1.30 mln rupees
* Ola Electric launches three EV bikes with 200-579 kms ranges
* Hero MotoCorp working on hybrid technology for 2-wheelers - CEO Gupta
* Mazagon Dock Apr-Jun consol PAT up over 2-fold YoY at 6.96 bln rupees
* Data Alert: Two-, three-wheelers drive India vehicle sales in July
* Hero MotoCorp Apr-Jun PAT up 36% on year, misses Street view
* M&M's automobile output down over 1% on year at 69,138 units in July
* Olectra Greentech Apr-Jun consol PAT up 32.7% YoY at 240 mln rupees
* India July tractor sales up 1.6% YoY at 59,529 units, exports flat
* Amara Raja signs MoU with Piaggio to supply electric vehicle parts
* CIE Automotive to subscribe up to 31.2% stake in ReNew Green
* M&M denies report of tie-up with China co to set up unit in Gujarat

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anshul Choudhary
Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.