mentioned that double-digit decline is expected across segments against May’19
figures. It expects a swift recovery in volumes from Q2 FY22 due to lockdown
easing and pent-up demand.
firm compared the May’21 figures to May’19 numbers as volumes were not
comparable year-on-year (YoY) due to the low base in May’20. In comparison to
May’19, May’21 volumes are expected to witness a double-digit decline across
segments. Tractors or Passenger Vehicles (PVs) are expected to see a low
decline in comparison with Two-wheelers (2Ws) or Commercial Vehicles (CVs).
gave the following predictions for the different vehicle categories along with
a two-year CAGR for domestic volume:
Tractor volumes will be subdued on account of the severe impact of
the pandemic in rural areas. CAGR: -21% for Escorts (ESC) and -23% for M&M
PV industry volumes are expected to be in the slow lane, despite
healthy order-book across most OEMs. CAGR: -4% for Tata Motors Domestic CV
(TTMT), -31% for MM and -49% for Maruti Suzuki (MSIL).
2W industry volumes would be weak. CAGR: -43% for Royal Enfield
(EIM-RE), -51% for Bajaj Auto (BJAUT), -54% for TVS Motors (TVSL) and -58% for
Hero MotoCorp (HMCL).
CV industry volumes would be under pressure due to lower freight
availability, resulting in the postponement of purchase orders by transporters.
CAGR: -55% for MM, -59% for Ashok Leyland (AL), -60% for Eicher Motors CV
(EIM-VECV) and -61% for TTMT.
firm shared a positive view on the automobile sector underpinned by expectations of
a strong cyclical upturn, which is expected to last at least three years.
Top picks among
Original Equipment Manufacturers (OEMs) are TTMT (TP: Rs 410), AL (TP: Rs 155),
MSIL (TP: Rs 8,500) and EIM (TP: Rs 3,180).
Source – Emkay Global Financial Services Press Release