Monthly Update : SUVs continue their good run, exports recovery on track by LKP Securities
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Sector performance
The month of May has shown strong volume performance for the SUV segment, while CVs have shown some positivity. Improvement in sentiments, absorption of price hikes, new model launches and slow and steady revival of rural markets has led to good growth in 2Ws on YTD basis and SUVs. CVs have performed well on low base, especially the lighter segment. 2W exports have put up a decent growth on yoy basis despite the Red Sea crisis. In the month of May, the temporary muted nature of 2W sector was on account of Union Elections across the country.
We believe growth to comeback in June. On the PV front, SUV growth story remained intact. On the CV side of the sector, we witnessed overall growth for Ashok Leyland, while for Tata Motors we saw LCV segment posting strong growth. Tractor makers witnessed a mixed trend, as M&M posted a mid-single digit growth, while Escorts and VSTT posted de-growths. However, they both reported robust sequential growths
Company wise performance
Among the PV OEMs, MSIL posted sales of 1.74 lakh units. On a yoy basis, the total sales in the domestic markets rose by 0.1% yoy while the exports de-grew by 34.4% yoy. Total sales went down by 2% yoy. SUV positivity was offset by the deceleration in the small car segment which fell by 19%. The compact car segment as well de-grew by 4.5% yoy and grew by 19.8% mom. The SUV segment continued its splendid run at 17.7% yoy while de-growing at 4.2% mom as MSIL is now the #1 SUV player in the country led by its healthy SUV portfolio.
TaMo’s PV segment saw a 2% yoy growth and 2.5% mom de-growth. M&M’s SUV segment on the other hand, continued its strong run and jumped by 31.4% yoy and 5.4% mom. CV division was down by a bit 1.2% yoy and 10% mom. For Ashok Leyland as well MHCV sales rose by 11.8%% yoy and 1.3% mom. LCVs also posted 11.8% growth yoy and by 5.7% mom, while total sales grew by 11.8% yoy while growing by 2.9% mom.
M&M’s tractor business in the domestic markets grew by 6.4% yoy and fell by 1.6% qoq. Escorts Kubota domestic tractor sales de-grew by 5.4% yoy, while growing by 14.8% mom. VST Tillers compact tractors segment plummeted by 33.2% yoy and grew by 101% mom signalling recovery on above normal monsoon expectations. Tillers fell by 33.2% yoy while tractors by 29.5% yoy.
2W sector has been the outperformer in the industry for a while now. On a YTD basis, though Bajaj has grown by 7.6%, May witnessed a subdued performance on the back of elections. In 2W segment Bajaj reported de-growth of 3.3% yoy and 13.2% mom for its domestic motorcycles, while exports motorcycles rose by 3.8% yoy and fell by 6.2% mom on the continuation of Red Sea Imbroglio. A continued traction in exports is necessary to confirm the momentum going forward. Their 3W segment moved up by 9.4% yoy domestically on a good pick up in the CNG portfolio and e-3Ws. Exports 3Ws posted a fall of 5.5% yoy
TVS 2W segment reported 12.6% yoy growth of which motorcycle segment grew by 7% yoy, while scooters grew by 20% yoy, I-Qube, the e-scooter sales were ~17.9K v/s 18.6K yoy. Mopeds segment of TVS grew 13.3% yoy. 3Ws decreased by 8.8% yoy but rose by 14.4% mom. Hero Motocorp witnessed a de-growth of 4.1% yoy and 6.6% mom in May.
Please refer disclaimer at www.lkpsec.com/#foo
SEBI Registration number is INM000002483
