The volumes in June 2021 have seen a rise,
due to a pickup in retails in the last month, according to Emkay Research.
These volumes will further improve in Q2FY22 as the lockdown will ease. The automobile sector stays positive and the
top picks amongst OEMs are TTMT, AL, EIM. Also, the domestic tractor volumes
were above estimates. The volumes grew at a robust pace and saw a rise of 31%
year on year for MM and 13% for ESC. The growth rate was higher for MM because
it had a favourable base. Also, due to lower government subsidies and a high
base, the volume will decline in FY22, despite a strong start this year.
The domestic PV
industry volumes also saw an increase to 255,700 units, which means a 6% CAGR
over June 2019. The CAGR for two years for TTMT was 34% and for MSIL it was 7%.
On the other hand, MM saw a decline of 5%. As the lockdown restrictions will
ease, improvement is expected in Q2FY22. Other factors for this improvement are
pent-up demand and low dealer inventories.
Due to healthy
demand and stable forex rates in Latin America and Africa, domestic 2W volumes
have reduced while the exports were robust. CAGR for BJAUT for two years was
-12%, -20% for TVSL, -15% for HMCL, and -19% for EIM-RE.
The volumes for
the CV industry have also fallen. The Two-year domestic volume CAGR was -12% for MM, -30% for AL, -26% for TTMT,
and -35% for EIM-VECV. It is expected that the demand will improve based on
better macros, infra spending, and recovery in replacement demand.
Source – Press release of "Emkay"
Image Source: Press release of "Emkay"