PV industry volumes grew 14% YoY on a relatively low base; analysts at IIFL Capital Services expect it to taper down starting June. 2W industry volumes grew YoY by a healthy 23%. While commentary on the domestic 2Ws is positive, exports should start picking up at a fast clip from the current subdued levels. Tractors stayed flattish YoY, registering decent volumes. While MHCVs grew 2% YoY, LCV industry declined 10% YoY, which is a continuation of weak trend in recent months. However, CVs should start increasing sequentially. Based on these numbers, analysts at IIFL Capital Services believe that the risk to FY24 volume projections is to the downside.
MHCV to pick up sequentially; LCV stays weak
MHCV sales grew 2% YoY in May 2023. MHCV SAAR, which had plunged to 340k in April 2023, slightly improved to 347k in May. The drop earlier was due to reversal of pre-buy impact in March 2023 (related to BS-VI Phase 2). On a CY2023 YTD basis, MHCV sales are up 16% YoY. Ashok breached its market share gain streak in MHCV, while Tata Motors regained lost market share. LCV industry declined 10% YoY; analysts at IIFL Capital Services see this as a continuation of recent weak trend. On a CY2023 YTD basis, LCV industry is flattish YoY.
PV sales up 14% YoY
Analysts at IIFL Capital Services estimate PV industry to be up 14% YoY in May 2023. The base was favorable at 294k units in May 2022; this will turn adverse from June onwards. Maruti’s May 2023 market-share stood at ~43%, which is similar to its FY23 market-share. Tata’s market-share stood at ~14% in May-2023, similar to trends in recent months. M&M’s UV volumes continued to be high at 33k, above monthly average of 30k in FY23.
Tractors flat YoY; FY24 estimates dependent on monsoon levels
Volumes stayed flat YoY in May 2023. The OEMs remain positive on the segment, given the normal rainfall forecast, adequate reservoir levels and better credit availability. Analysts at IIFL Capital Services are currently forecasting 5% growth for tractor industry in FY24. If monsoon is impacted due to El Nino effect, there would be downside risk to their estimate.
Domestic 2Ws up 23% YoY; 2W exports stay weak
2W industry volumes grew ~23% YoY and 14% MoM in May 2023. General commentary amongst the OEMs looks positive, driven by an uptick in customer sentiments and other macro factors. This is reflected in the May volumes. Coming to 2W exports, analysts at IIFL Capital Services continue to see a sharp YoY decline in volumes. On a sequential basis, volumes are improving and should start picking up at a faster pace.
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