June Auto Sales: Auto stocks down on mixed sales amid weak exports; Bajaj Auto, Maruti Suzuki, Tata Motors in red
June Auto Sales: Auto stocks down on mixed sales amid weak exports; Bajaj Auto, Maruti Suzuki, Tata Motors in red
Automobile companies witnessed mixed sales during June, with most auto majors posting weak exports for the month.
Shares of most automobile companies traded largely lower on Monday with the Nifty Auto index falling nearly half a percent after auto makers reported mixed sales numbers for the month of June.
However, Nifty Auto index also hit a 52-week high in the early trade, rising nearly a percent from previous close. However, the index ended 0.16% lower for the day.
The month of June was a mixed bag again for the auto companies. Two-wheeler witnessed a good performance in May, however month of June saw a weakness. On the Passenger Vehicle (PV) front, all the companies have posted strong growth led by the SUV growth story. However, auto companies saw weak exports during the month.
The top drags among the auto stocks included Bajaj Auto that fell nearly 2% followed by Maruti Suzuki India, Tata Motors, Hero MotoCorp and TVS Motor Company, along with some auto ancillary names such as MRF, Tube Investments of India, Balkrishna Industries, among others.
Shares of Eicher Motors and Mahindra & Mahindra rose over a percent each.
Two and three wheeler manufacturer Bajaj Auto recorded a 2% on-year fall in its total wholesales volume for the month of June 2023, largely dragged by lower exports. The company sold a total of 3,40,981 vehicles in June this year as compared to 3,47,004 units sold in the same month last year.
Another two-wheeler maker Hero MotoCorp reported total sales at 4,36,993 units in June 2023, registering a decline of 9.9% when compared to 4,84,867 units sold in the same month last year. The fall in sales was largely due to lower export sales that plunged more than 34%.
TVS Motor’s total auto sales grew by 3% YoY at 3.16 lakh units during the month, while Eicher Motors’ Royal Enfield motorcycles sales increased 26% to 77,109 units from 61,407 bikes, YoY.
manufacturer, Maruti Suzuki India reported a 2% rise in its total wholesale as it dispatched around 1,59,418 units to dealers as against 1,55,857 units in June last year.
Tata Motors’ total sales fell 1.1% to 81,673 units in June 2023 from 82,570 units sold in June 2022. M&M reported total auto sales for the month of June 2023 at 62,429 vehicles, registering a growth of 15.4% from 54,096 units sold in the same month last year.
Total sales of Escorts Kubota declined 2% to 9,850 units.
“Going forward, the impact of expected El Nino needs to be seen on the rural centric segments. CVs have started witnessing a strong comeback post dip on the back of BS VI phase-2 implementation, as strong underlying parameters would keep the going strong. Tractor industry growth needs to be monitored as well on expected El Nino setting up in the coming monsoon,” said LKP Securities.
It remains positive on the sector. Within the two-wheeler, it likes Bajaj Auto and TVS Motor Company. While on the PV side, it likes M&M and Maruti Suzuki India.
It likes Ashok Leyland within CVs as it has a diversified revenue base deriving from LCVs, Defense, MHCVs, exports and spares.
“Every dip in the stocks mentioned above, shall provide good opportunities for investors to enter into them from medium to long term perspective,” LKP Securities said.
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