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Informist, Friday, May 30, 2025

MUMBAI – Shares of large automobile companies are likely to be in range on moderate expectations for sales volumes in May, which will be released starting Sunday. The outlook for the sector is muted on weak demand in urban domestic markets and the possibility of exports slowing down on subdued global growth, analysts said. 

Brokerage Nomura expects passenger vehicle volumes for Indian companies in May to fall 1% on year and Anand Rathi Share and Stock Brokers sees them rising 2%. The two brokerages expect two-wheeler sales volume to rise 2-5% and tractors' volumes to increase 3-11%.

The brokerages said the strong marriage season and better rural sentiments are likely to support growth in two-wheelers. Within two-wheelers, Eicher Motors's Royal Enfield sales volume is expected to rise 20-21% and TVS Motor's sales are seen growing 13-19%. Hero MotorCorp sales volume growth is likely to be poor, with brokerage Anand Rathi expecting growth of only 3.5% and Nomura expecting sales to be flat.

The outlook for passenger vehicles remains weak. Nomura pointed out that their interaction with dealers showed retail demand has slowed down for passenger vehicles and channel inventory has also risen. Maruti Suzuki, the largest car-maker in India, is expected to report a decline of 1-5% in the domestic market in May, estimates by the two brokerages show. "We expect factors such as lower income taxes and reduced interest rates to support demand, though the improved demand might be evident only by 2HCY25F (Jul-Dec)," Nomura said about the passenger vehicle segment.

Outlook for export markets also appears to be weak, Nuvama Institutional Equities said in a report Thursday. "The global auto industry suffered volume contraction across segments in Q1CY25 (Jan-Mar). Expectations from 25-plus global entities signal a persistently weak outlook for CY25 (2025)," the brokerage said.

This is likely to impact Bharat Forge, Balkrishna Industries, and Samvardhana Motherson International, Nuvama said. "Even so, these firms should outpace industry, in our view, on orders/diversification efforts," it said.

TOP HEADLINES

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* Earnings Review:Ola Electric Jan-Mar loss more than doubles YoY, sales halve
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* Ola Electric starts deliveries of electric motorcycle Roadster X

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Anshul Choudhary

Edited by Saji George Titus

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