, along with other commercial vehicle (CV) players, are likely to steal the limelight as the monthly sales data for November starts pouring in from Wednesday onwards.
Analysts estimates show Tata Motors CV business is likely to show 11-27 per cent year-on-year (YoY) sales growth, the most among its competitors. In the passenger vehicle (PV) segment as well, Tata Motors is likely to lead the charts with an expected growth rate in the 39-49 per cent range.
Overall, PV volumes are likely to take a hit among chip shortages, though volumes should be slightly better month-on-month. On the CV front, the positive momentum is likely to continue. Two-wheelers and tractors are likely to decline due to the moderation in rural demand and high base effect on account of pent-up demand last year, said analysts.
“We also note that initial trends suggest a relatively muted start to the marriage season, which should further impact dispatches. Tractors are expected to witness a decline on a YoY basis due to a high base. However, we note that rural sentiments are relatively strong, which should augur well for the industry in the coming months,” said Mohit Gupta, Research Analyst at Nirmal Bang.
“While festivals were a tad disappointing due to chip shortages, we see scope for regaining lost volume during the leaner months post festivals, led by strong demand and improving supply chain dynamics.”
CV volume: Analysts expect CV segment volume to recover, led by demand from the Infrastructure & Construction sectors. Conversions, they said, have been affected due to cash-flow issues, relatively slower economic activities and slightly subdued sentiments (amid rising fuel costs). Although they believe there is a strong case for volume rebound as these constraints are addressed in the coming months.
Tractors: Analysts expect tractor demand to ease due to a high base. However, underlying rural sentiments are holding reasonably well, which should support volumes going forward, analysts noted.
Two-wheelers: Domestic 2W dispatches are expected to improve with a gradual pick-up in inquiry levels and improving consumer sentiments. However, OEMs with a higher export exposure are relatively better placed to navigate the slowdown in the domestic market, enabling them to outperform peers.
PV volume: PV volume would be affected by supply chain constraints. Analysts expect a faster normalization and expect the segment to recover faster on the back of easing lockdown restrictions, sustained demand, low inventory levels, high waiting periods and growing preference for personal mobility.
Analysts, meanwhile, are positive on the whole sector.
“We retain a positive view on the auto sector, underpinned by expectations of a cyclical upturn in the next three years. We like Tata Motors (TP: Rs 550), Ashok Leyland (TP: Rs 160), Maruti Suzuki (TP: Rs 8,750) and Hero Moto (TP: Rs 3,700),” said
Nirmal Bang analysts said they maintain a relatively cautious stance on Maruti, Hero MotoCorp,
and Tata Motors.Internet Explorer Channel Network