Automobiles & Auto Components share price target

MSIL’s total sales volumes for the month of October 2023 saw a strong growth of 18.9% YoY/ 9.9% MoM. Total Domestic sales grew by 20.5% YoY/ 11.6% MoM. Exports grew by 7.4% YoY but declined by 2.5% MoM.

Auto Monthly Update - Oct 2023

With disparity in Navratri periods last year in contrast to this year, PV and 2W players reported strong double-digit YoY domestic growth topped with MoM improvement, as wholesales outstripped retails propelled by seasonality. On the flipside, in CVs, volume dipped MoM by ~20% for the leaders – this is alarming.

Is the auto sector revving back to life? A 20% YoY surge in September vehicle sales suggests that India’s auto market is shifting back into high gear. Climbing from 17 million to 21 million units within a year, the sector seems to be recovering from a prolonged slump, but it's not yet back to its 2020 peak of 26 million.

As per data released by the Society of Indian Automobile Manufacturers (SIAM) for the months of July and August 2023, the 2-wheeler (2W) segment saw a decline of 3.1% YoY while 3-wheelers (3W) and Passenger Vehicles (PV) grew by 73.3%/ 5.9% YoY, respectively in the 2-month period. The industry data for the month of September 2023 is not available as of the date of the report.

In September 2023, the automobile industry saw a 20.4% YoY increase in retail sales, amounting to 18.8 lakh units. Breaking it down, two-wheeler sales surged by 21.7% YoY, reaching 13.1 lakh units, and car sales grew by 19% YoY, totaling around 3.3 lakh units.

All segments of the industry, except for Tractor OEMs, observed a MoM and YoY rise during this period.

AUTO Q2FY24 Earnings Preview

Automobile wholesales of listed companies rose by 2.5% YoY to 15.5 lakh units in September, while exports increased by 3.1% YoY to 2,52,396 units. Domestic two-wheeler wholesales of listed companies increased by 0.8% YoY to around 11 lakh units and passenger vehicles rose by 2.8% YoY to 2.4 lakh units.

Auto Monthly Volume Sep 2023