[ad_1]
The automobile industry considers the festive season to be crucial and this year, it seems that two-wheelers and tractors will lead the way.
At the wholesale level, two-wheelers saw double-digit growth ahead of the festive season. And this, despite a seemingly weak start. However, wholesalers Bajaj Auto, TVS Motor, Hero MotoCorp and Royal Enfield all beat expectations, with original equipment manufacturers (OEMs) forecasting a recovery in October 2024.
Click here to join us on WhatsApp
Two-wheeler numbers will need to be closely monitored as weak momentum would lead to a downgrade in the ratings of stocks that have risen in anticipation of outperformance.
Additionally, shipments would collapse if expectations are not met, as there has been a significant inventory buildup in anticipation.
Bulk shipments for Bajaj, TVS, Hero MotoCorp and Royal Enfield increased by 22%, 22%, 19% and 11% YoY (y-o-y), respectively, to 400,500, 471,8000, 637,000 and 87,000 units. .
Export shipments for Bajaj and TVS rose 13 percent and 11 percent year-on-year respectively due to a rebound in Africa. Hero MotoCorp expressed positive sentiment as the festive season began and came up with festive offers.
In other auto segments, PVs are slightly lower due to slack demand and high dealer inventories. CV volumes declined due to slow infrastructure/investment recovery and heavy rains.
But tractor volumes are up, accompanied by strong feedback from management. These two segments, tractors and two-wheelers, are ahead of the others. Both are expected to witness double-digit volume growth in H2FY25.
For Hero MotoCorp (HMCL), volumes rose 19 percent year-on-year to 637,050 units, above Street estimates of 590,000. Domestic volumes grew 19 percent and exports rose 22 percent. . But registration volumes (vahan) were reported at 251,356 compared to 616,706 in bulk.
For Bajaj Auto, volumes grew 20% year-on-year to 469,531 units, above consensus estimates of 433,000 due to better-than-expected domestic and export two-wheeler volumes. The domestic market grew by 23 percent. Nationally, two-wheelers increased by 28 percent and three-wheelers by 4 percent. Exports increased by 13 percent. Within exports, two-wheelers increased by 13 percent and three-wheelers by 16 percent. Registration volumes were reported at 169,363 units compared to 311,887 wholesale sales.
Bajaj Auto received positive feedback in the domestic and export market, with the African market recovering, with Nigeria at 25,000 in September from 20,000 in August. The upcoming season from October to December 2024 would be good. Going forward, volumes are expected to improve 10% month-on-month, with domestic industry growth of 6-8% expected in October 2024. Green Energy (EV+Yulu+ E3W+CNG) combined contributed 40% to the domestic market. revenue in September 2024. The above 125cc motorcycle industry outperforms. The EV volume momentum is expected to continue and Bajaj hopes to be a leader in this segment by the end of FY25. The company is also close to leadership in the e3W space.
TVS Motor saw its volumes increase by 20% year-on-year to reach 482,495 units, above the estimated 440,000. National units increased by 23 percent. Nationally, two-wheelers increased by 23 percent, three-wheelers by 33 percent. iQube volumes increased 42 percent to 28,901 units. TVS exports increased by 11 percent. Within exports, two-wheelers increased by 19 percent, but three-wheelers fell by 40 percent. Registration volumes were reported at 212,211 units compared to 371,488 wholesale sales.
For Eicher Motors, Royal Enfield (RE) volumes rose 11% year-on-year to 86,978 units, above the estimated 83,000. The domestic market grew by 7 percent and exports by 77 percent. In the commercial vehicle sector, volumes increased by 6 percent to 7,609, while the domestic market grew by 2 percent, exports by 90 percent and Volvo by 23 percent. Registration volumes for Royal Enfield were 54,021 compared to 79,326 wholesale and for VECV 5,991 compared to 6,847 wholesale.
Positive sentiment is encouraging, but investors should follow sales data with caution as inventories are high. A slowdown could lead to a sharp correction.
First publication: October 3, 2024 | 9:50 p.m. STI