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The automotive industry saw strong performance in FY24, driven by EBITDA margin increase and premiumization strategies. Domestic auto players outperformed export-oriented rivals in Q2FY24. The Indian passenger vehicle market experienced significant growth, but sustaining momentum in FY25 is expected to be challenging.

Dhruv Mudaraddi, a research analyst at StoxBox says: “PV OEMs intend to raise retail prices beginning in January 2024 because of increased input costs. The demand dynamics in FY25 are anticipated to be greatly impacted by this price spike.”

“FY24 is predicted to be a record year for commercial vehicle sales due to more government spending on freight and infrastructure.Two Wheelers' domestic sales increased 17% YoY to 159 Lakh units in FY23, with modest growth expected in FY24 and FY25”, addsDhruv.

Top Picks for 2024

Ashok Leyland, Hero MotoCorp, and Minda Corporation are the top picks for the 2024 according to StoxBox. Dhruv offers his recommendations: "Ashok Leyland grew 10% YoY in Q1 2024, with revenue targets of Rs 800-1000 crores as a result of the change to a new tax regime. Hero MotoCorp expects to boost volumes in the second half of FY24 in anticipation of increasing demand for luxury motorcycles and scooters during the post-festival season.”

"With its strong order book and EV-ready products, Minda Corporation's growth is expected to surpass 20% over the next three to five years," Dhruv goes on.

The automotive industry's future in 2024 is complex, requiring creative thinking and proactive responses to market changes. Organizations with flexibility, inventiveness, and strategic direction are recommended.

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