Automobiles & Auto Components share price target

November saw the highest retail sales in the automobile industry at 23,80,465 units. Although retail sales of two-wheelers fell 8.4% MoM, they increased 23.6% YoY to 18,47,708 units. Cars rose by 21.3% YoY to 3,00,922 units in the same period.

Post outperforming the benchmark NIFTY50 by ~20% in H1CY22, India auto index (BSE Auto) remained largely stagnant in past five months, due to weak demand from rural and export markets along with below-par profitability.

Automobile wholesales of listed companies rose 14.9% YoY but fell 20.7% MoM to 11,25,434 units in November. Exports went down 20.6% YoY to 2,46,951 units.

Hero Motocorp (HMCL) reported wholesale volumes of ~390k units, down 14% MoM (up 12% YoY). Motorcycle segment volumes fell 16% MoM while scooter volumes were up 9% MoM.

In continuation to our monthly Retail series, key highlights of Nov’22 include: a) Overall retail registrations continue to be strong post the festive period (up 5% MoM).

Retail sales in the automobile industry rose 47.6% YoY in October 2022 to 20,94,378 units. Retail sales of two-wheelers increased 51.1% YoY, while cars rose 40.6% YoY in the same period. Gains were seen across all auto segments.

Automobile wholesales of the listed companies rose 2.5% YoY to 14,06,300 units in October while exports fell 27.1% YoY to 2,43,536 units.