Auto stocks are in focus ahead of the GST Council meeting tomorrow. The stocks have been buzzing on the back of August sales. The Nifty Auto Index is up 1% in the last 5 days and the list of automobile sector stocks have been clocking steady gains over the last few weeks in anticipation of lower GST rates ahead of the festive season sale.
This is particularly a concern, as August sales indicated a mixed trend for the automobile sector. The passenger vehicle sales have shown signs of slowdown while two-wheelers and tractors offered some bright spot. According to brokerage firm Nomura, sales performances across companies were uneven, with some names outperforming estimates and others falling behind.
“Compared to our estimates, sales for TVS were 10% ahead, while Mahindra & Mahindra were slightly ahead. Hyundai, Ashok Leyland, Eicher Motors, Bajaj Auto, Tata Motors were in-line, while Maruti Suzuki’s sales was below expectation,” Nomura added.
ALSO READGST cut hopes stall auto sales in August Nomura on India Autos: Passenger vehicles face a weak month
The brokerage firm Nomura highlighted in its report that passenger vehicle volumes were muted in August. Retail data indicated that sales were up only 1% year-on-year, while wholesales were under pressure.
Furthermore, the brokerage report added, Maruti Suzuki India reported domestic sales of 131,000 units, down 8% year-on-year, falling short of Nomura’s projections.
However, exports provided some cushion, rising 41% to 36,500 units. Tata Motors also struggled on the domestic passenger vehicle front, with sales slipping 7% year-on-year to 41,000 units. On the other side, electric vehicle sales hit a new high of 8,500 units, supported by the launch of its Harrier EV.
“Dealer surveys indicate that retails were weak, but the high discounts of 100-150k on many popular models and an early festive season were supportive,” Nomura added in its report,
Nomura on India Autos: Two-wheelers – TVS shines, Bajaj slips
The two-wheeler segment on the other side offered a mixed picture. TVS Motor Company saw a sharp beat, with overall volumes at 509,000 units in August. This is a 30% jump from last year, well ahead of Nomura’s estimates.
ALSO READJefferies top auto picks: Why M&M, » Read More
