Automobiles & Auto Components share price target

Maruti Suzuki’s total volumes for the month of March 2023 were almost flat YoY (-0.2% YoY) and declined by 1.3% MoM. Total Domestic sales declined by 2.7% YoY and 9.8% MoM. Exports grew by 13.7% YoY and saw a sharp MoM improvement of 75.0%. For FY23, Maruti Suzuki sold vehicles totalling 19,66,164 units, a growth of 19.0% YoY.

Auto Monthly Volume Update - Mar 23

Automobile wholesales of listed companies rose 18.5% YoY to around 13.8 lakh units in March, while exports fell 30.4% YoY to 2,06,035 units.

Domestic two-wheeler wholesales of listed companies were up 22.9% YoY to 9,55,681 units and those of passenger vehicles rose 4.4% YoY to 2,12,804 units.

The Indian automobile industry eclipsed Japan and Germany for the first time in January 2023 to become the third-largest auto market in the world. At the domestic level, the Indian auto industry is valued around USD 100 billion and contributes nearly 8% of the GDP.

Monthly average 2W retails in H2FY23 (1.46mn units) was ~27% higher than H1FY23 monthly average levels, signifying continuity of the improving retail trend post festive season. Thus with favourable base till H1FY24 we expect >10% growth for the industry in FY24E amid limited triggers for TCO inflation.

On a monthly basis, currently, domestic PV/2W retail volumes are up ~20% vs H1FY23 levels. M&HCVs stand at ~35k units+ monthly levels, similar to FY19 highs already, led by seasonality, demand driven by capex cycle and pre-buying driven by RDE norms coming from April.

Retail sales in the automobile industry saw a 16% YoY rise to 17,75,424 units in February 2023, with two-wheelers and cars going up 14.8% to 12,67,233 units and 11% to 2,87,182 units respectively.

On a year-on-year basis, gains were seen across all auto segments.

Automobile domestic wholesales of listed companies rose 18.5% YoY to 11,75,119 in February, while exports dipped 38.4% YoY to 1,96,551 units.

Domestic wholesales of two-wheelers went up 20.7% YoY to 7,88,490 units and passenger vehicles rose 9.5% YoY to 220,687 units in February.