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Jun-25 Auto dispatches were generally muted, save for the strong performance sustained at EIM (Royal Enfield; RE), TVSL, and a generally strong exports show across players/categories. 2W industry retail growth sustained at a mid-single digit; domestic dispatches at RE/TVSL/HMCL grew ~16%/10%/7%, resp, with BJAUT underperforming (16% domestic decline); 2W exports grew 57%/18% for TVSL/BJAUT. M&M continued to outperform in PVs, with double-digit YoY growth, though sequential volumes fell 10%; PV industry retail growth was muted at ~2%. Domestic MHCV dispatches remained weak at AL/TTMT (down 2%/9% YoY due to double-digit decline in trucks), while industry retails flattened after 4 months of decline. Tractors were a mixed bag, with domestic volume for M&M’s up ~13% and flat for Escorts. E-2W penetration improved to 7.3% vs 5.5%/6.1% in Apr/May; TVSL retained pole position, followed by BJAUT and Ola; HMCL’s share improvement also continued. E-3W penetration sustained at ~31%.

2Ws – RE and TVSL continue to lead the pack; improvement at HMCL

EIM’s RE continued to outperform, with total volumes up ~22% YoY to 89.5k units (16%/79% growth in domestic/exports); TVSL recorded ~20% growth in 2W dispatches to ~386k units, comprising of ~10%/57% growth in domestic/exports. HMCL’s domestic growth accelerated to 7% vs 2% in May, with overall dispatches at 554k units, up 10% YoY. BJAUT underperformed, posting 16% domestic decline to 149.3k units, though exports performance was healthy – up 18%; overall 2W dispatches dipped 2% to 298k units. 2W industry retails witnessed ~5% growth vs ~3%/8% in Apr/May, led by RE/TVSL, with BJAUT/HMCL posting muted performance. E-2W industry retails grew ~32% YoY to ~105k units, with E-2W penetration rising to 7.3% vs 5.5%/6.1% in Apr/May; TVSL retained leadership, followed by BJAUT, Ola; HMCL’s improvement also continued.

PVs – M&M outperforms, though volumes range-bound

M&M continued to outperform peers, with domestic PV volume up ~18% YoY at 47k units as against 12-15% YoY decline at peers; however, absolute volume at M&M was lower on sequential basis (range bound in recent months, despite benefit of new launches), like most competition. MSIL’s total dispatches witnessed a 6% decline YoY to 168k units, dragged by both—cars and UVs (down 17% and 9%); UV mix fell, to 28.5% (vs 30.5% in May-25); however, exports were at an all-time high of ~38k units. TTMT/HMIL saw a ~15%/12% decline in domestic PVs, while HMIL’s exports grew 15% YoY. PV industry retail volume grew 2%; M&M topped, with ~11% growth; MSIL growth was flat.

CVs – Weak MHCV truck sales; industry retails flat after 4 months of decline

AL’s total volumes rose 2% YoY to 15.3k units led by exports; domestic MHCVs declined 2%, dragged by 12% degrowth in trucks. At TTMT, domestic CV volumes fell ~9%; MHCV volumes were also down, by ~9%, dragged by the 17% fall in heavy trucks. MHCV industry retails were flat in Jun-25 after 4 consecutive months of decline; AL outperformed strongly in retail terms, with 6% MHCV growth vs ~9% dip in TTMT retails.

Tractors –M&M posts double-digit growth; Escorts growth flat; outlook positive

M&M’s domestic tractor dispatches were up ~13% YoY vs flat dispatches at Escorts. Per mgmt commentary, industry performance was helped by healthy farm liquidity and timely arrival of monsoons; also, sentiment remains conducive to continued growth on the back of prediction of an above-normal monsoon season and anticipated record Kharif harvest.

Our view – We favor TVSL/EIM in 2Ws; we also like MSIL/TTMT in PVs

We maintain a positive view on the 2W segment, underpinned by improved replacement led demand visibility (with industry volumes still trailing the FY19 peaks), potential rural recovery after a prolonged softness, and improving exports (as macro challenges in key exports markets soften). We expect TVSL and EIM to outperform, supported by strong product actions and disciplined pricing amid sustained growth in domestic as well as export volumes. Within PVs, we prefer MSIL, given its ICE launch visibility, and TTMT for its sustained profitability led by focus on mix and cost.

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