Auto income for the month of February remained subdued across all segments, with statistics showing that the retail income had been disappointing in February amid a high quantity of unsold stock and tepid shopping for sentiments.
Nomura said that the disadvantage risk keeps for most auto corporations except Bajaj Auto. It expects the industry overall performance to remain vulnerable within the near-term on high stock and growing value stress. Hence, wholesalers are probable to stay subdued notwithstanding some development in retails in March because of marriage season. The brokerage continues a 9 percent YoY industry boom estimate for FY20F. Top pick for Nomura from vehicle area is Maruti Suzuki.
Meanwhile, Deutsche Bank believes that the two-wheeler segment (2W) witnessed a third consecutive month of decline in February 2019, at the again of sturdy February 18 base of +24% YoY. Among the mass-marketplace players, Bajaj Auto (6 percent YoY), TVS Motor (0.Five percentage YoY) outperformed the market while Hero MotoCorp changed into broadly in-line.
Motilal Oswal stated that the passenger automobile (PV) volumes remained bad however look like improving because of new product launches and coffee channel inventory. Speaking approximately tractors’ quantity growth, it slowed down thanks to an excessive base and muted farm sentiment in key markets. The brokerage prefers PVs over CVs/2Ws because of their more potent extent boom and solid competitive surroundings. The pinnacle choices from big caps are Maruti Suzuki and Motherson Sumi Systems, and Endurance Technologies and Exide Industries from mid-caps.
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