NEW DELHI: Auto stocks will be in focus on Wednesday after domestic auto companies on Tuesday posted strong sales data for April, mostly beating Street estimates.
This should create upside prospects for some of these stocks even after baking in a weak base.
The countrys largest passenger carmaker Maruti reported a 14.2 per cent surge in domestic sales at 164,978 units against estimates of single-digit growth due to capacity constraints. Total April sales rose 14.4 per cent to 172,986 units.
Tata Motors reported 86 per cent growth at 53,511 units compared with 28,844 units sold in the year-ago month. A strong show by the commercial and passenger vehicles businesses aided this growth. Passenger sales rose 34 per cent to 17,235 units, while the commercial vehicles segment reported total sales of 36,276 units.
The company attributed the growth to improved industrial activities and robust demand from the private consumption-led sectors.
Companies producing commercial vehicles (CVs) were expected to report strong growth on a low base because of the shift to BS-IV emission norms in April 2017.
M&M reported 22 per cent growth in April sales. The company sold 48,097 units compared with 39,417 units in April, 2017. Domestic volumes grew 19 per cent YoY to 45,217 units, while exports rose 88 per cent YoY at 2,880 units.
Eicher Motors clocked 27 per cent YoY jump in sales at 76,187 units.
Hero MotoCorp and Bajaj Auto were yet to report their sales numbers till the time of filing of this report. Two-wheeler companies are expected to continue with their growth momentum and report double-digit volume growth backed by an improvement in rural demand and on wedding season demand, Nirmal Bang Institutional Equities said in a note.
Auto stocks have risen up to 17 per cent in the past one month. Among major gainers, Eicher Motors is up 12 per cent, Ashok Leyland 14 per cent and M&M 9.44 per cent.
Maruti Suzuki and Tata Motors have risen up to 2 per cent. Two-wheeler makers Hero MotoCorp and Bajaj Auto are up 8 per cent and 4 per cent, respectively.
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