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According to Emkay Global Financial Services, Domestic 2W underlying retail data registered a strong uptick during the early part of the festive season (like-to-like Ganesh Chaturthi period) as well as for the month as a whole. The growth in dispatches, though, was soft due to delayed festive inventory buildup across players. Domestic wholesales of HMCL/TVSL/EIM grew ~2%/~6%/~1% YoY (to ~520K/~300K/~74K), respectively, while retails (as per the VAHAN portal) were up ~31%/~28%/~8% YoY, respectively (EIM outperformed on MoM retail growth, up ~11%). BJAUT’s domestic wholesales fell by ~9% YoY to 202.5K units.

Strong start to retails in the 2023 festive season; all segments performed well in the just-concluded Ganesh Chaturthi period: According to the research report of Emkay Global Financial Services, overall automobile registrations, across segments (excl. buses), for Ganesh Chaturthi period for 2023 recorded a growth of about 16% at 6,54,941 units from 5,64,735 units during Ganesh Chaturthi period of 2022.

Ganesh Chaturthi registrations for 2W recorded a growth of 17.8% to 4,65,111 units. Ganesh Chaturthi registrations for PVs recorded a growth of 1.7% to 1,07,503 units. 3W reported the highest growth (in % terms) in automobile category of 70% which accounted to registrations of 37,961  units. Other segments such as LCV, Tractors and MHCV recorded Ganesh Chaturthi registrations of 17, 847; 17,417 and 9,102 units respectively.

2W exports a mixed bag; TVSL posts healthy improvement: 2W exports continued to improve sequentially at TVSL, rising ~15% MoM to ~86.4K units (best since Jul-22). BJAUT exports were flattish MoM. Royal Enfield (RE) exports declined ~47% MoM to 4.3K units, amid inventory de-stocking, given subdued customer sentiment in key markets of North America and Europe, as per channel checks.

E-2W retails consolidate; Ola remains leader, with TVSL fast catching up: Absolute E-2W volumes grew 18% YoY (flattish MoM) to ~62.9K units, with penetration levels at 4.8% vs. 5% in Aug-23 and 4.5% for FY23. Among OEMs, Ola remained the market leader with ~18.6K retails (~29% share), followed by TVSL at second place with ~15.5K units (~4x rise YoY).

Strong growth in PV retails; growth in dispatches restricted to ~2.5% on delayed festive season: While the PV industry recorded its best-ever absolute monthly dispatches at ~363K units, the rate of growth was fairly muted at ~2.5% YoY. Retail growth though was much higher, at ~14% YoY. Market leader MSIL reported a miss on our estimate, at 181K units (domestic PVs up ~2.7% YoY to ~156K units), primarily on lower dispatches for small cars (to rationalize inventory, in our view), though it gained retail market share (retails up ~24% YoY). Its UV mix further improved to ~33% in Sep-23 vs. 31% in Aug-23/25% in Q1FY24. M&M outperformed on wholesales (record dispatches of 41k) and retails (up ~20% YoY/~30% YoY, respectively; MoM retail growth placed at 6.6%). TTMT under-performed the PV pack (domestic wholesales down 6% YoY/retails down ~9% YoY).

Industry MHCV retails grew ~8% YoY, with LCVs declining 4%; among OEMs, AL posted 2% YoY retail growth, with TTMT reporting a 3% decline. TTMT’s domestic CV dispatches were higher, by ~13% YoY. AL reported 10.3% YoY growth in domestic CV dispatches driven by ~14% higher MHCV sales.

Weakness in tractor volumes: M&M reported an ~11% YoY decline in wholesales, with retails up ~4% YoY. Industry retails were also down, by ~7% YoY. As per M&M, recovery in Kharif sowing, start of the festive season, and expectation of better Rabi sowing (amid recovery in monsoons in Sep-23) bode well for tractors. Escorts’ tractor volumes also declined by ~11% YoY.

Emkay Global Financial Services continues to prefer 2Ws, given that the ongoing domestic recovery is starting to accelerate and broaden (refer our report)—with gradual improvement also expected in exports, with the worst of the slump now behind. Among OEMs, Emkay Global reiterates preference for TVSL (structurally superior 2W play staking its claim for E-2W leadership as well), HMCL (strong premiumization drive, coupled with reasonable valuations) and EIM (starting to deliver on growth; to emerge stronger despite the recent competition amid a healthy own product pipeline.

Retail volume trend