Automobiles (wholesale) - Wholesales push on lower base as retails remain soft - ICICI Securities

Two-wheeler (2W): Premium motorcycle, scooters grow ahead of entry segment

- Hero MotoCorp (Hero) has reported sales of ~577k units, up 72% YoY/14% MoM. Motorcycle segment grew 72% YoY/13% MoM while scooter segment grew ~82% YoY/25% MoM.

- TVS Motors (TVSM) has reported 123% YoY/8% MoM growth to ~323k units. Domestic sales grew 115% YoY/4% MoM to ~203k units while exports grew 138% YoY/17% MoM at ~120k units. On segmental level, 2W sales grew 8% MoM to ~307k units and 3W sales grew 16% to ~15.2k units aiding by public transportation reopening. On a sub-segment basis, motorcycles and scooters grew 15%/9% MoM to 157k/105k units, respectively, while mopeds declined 12% to ~45k units.

- Bajaj Auto (BAL) has reported 52% YoY/ -1% MoM growth to ~370k units. Domestic sales grew 70% YoY/20% MoM to ~199k units, while exports grew 36% YoY/ -19% MoM to ~171k units. As per media reports, the exports MoM decline was attributed due to shipment delays of ~35k units. On a segmental level, motorcycle sales declined 1% MoM to ~330k units while 3Ws declined 7% MoM at ~39k units.

- Royal Enfield has reported 84% YoY/ -5% MoM growth to ~66k units with new product launches (e.g. Meteor) aiding volume growth. Motorcycle sales in 350cc segment grew 93% YoY to ~58k units while >350cc segment rose 39% to ~7.5k units. Exports reported 85%/29% MoM growth to 5.8k units.

- HMSI reported 56% YoY/-7% MoM growth with domestic sales clocking 61% YoY/ -4% growth to 395k units while exports were down 9% YoY/49% MoM at 16k units.

Passenger vehicles (PVs): UV space continues to drive growth

- Maruti Suzuki (Maruti) has reported 99% YoY/2% MoM growth at ~167k units. Mini-vehicle segment clocked 54% YoY/3% MoM growth at ~25k units, while compact segment grew 103% YoY/2% MoM to 82.2k units. UV segment dispatches declined 120% YoY/3% MoM at ~26k units. Dispatches to Toyota continue to grow rapidly (up 180% YoY/7% MoM at 5.9k units) likely due to Brezza variant - Urban Cruiser SUV launch. Domestic sales (ex-commercial & Toyota dispatches) were up 92% YoY/1% MoM at 146k units. LCV dispatches grew 3.5x YoY to 3.3k units while exports were up 1.5x YoY to 11.6k units.

- Mahindra & Mahindra's (M&M) volumes reported 393% YoY/9% MoM growth to 16.7k units with UV segment growing 435% YoY/8% MoM to 16.6k units. UV segment growth remains below potential due to supply-side issues as waiting period for new Thar continues to rise.

- Tata Motors' Mar'21 volumes were the highest ever sales in the past 9 years with 422% YoY/9% MoM growth at 29.6k units, strengthened its 3rd position in market share terms. New 7-seater premium SUV Safari is likely to further boost volumes. Our view: Post the sales rebound of Feb'21 dispatches, despite supply-chain issues, OEMs have maintained dispatches to create incremental buffer in the channel for the upcoming wedding season (Apr'21 onwards). However, the increase in vehicle prices in Jan'21/Apr'21 in wake of higher input could pose a challenge for broad based consumer sentiment revival (visible in weak retail demand trends). Faster vaccination could help in improving urban demand for a few segments (e.g. scooters, 3-Ws).

- Hyundai posted 100% YoY/5% MoM growth in domestic volumes at 52.6k units while exports grew 101% YoY/18% MoM to 12k units. The company is witnessing strong sales from the new i20, second-generation Creta and Venue iMT models.

- Kia Motors has reported 123% YoY/14% MoM growth to ~19k units in domestic sales. The recently launched compact SUV Sonet continues to drive sales momentum; however, new competition in SUV space seems to have moderated growth momentum.

- MG Motors' recently launched Hector refresh and the recently launched Gloster are growing steadily to reach the highest ever sales at 5k units (up 229% YoY/18% MoM).

- Toyota's domestic volumes were up 114% YoY/7% MoM to ~15k units. Launch of Urban Cruiser compact SUV (rebadged version of Maruti Brezza SUV) in Sep'20 has aided sales growth.

- Honda cars reported 92% YoY/-31% MoM growth in domestic sales at 7.1k units.

CVs: M&HCVs witness sequential improvement whiles LCVs continue to shine; rural demand continues to support tractors

- Ashok Leyland's clocked 710%YoY/26% MoM growth to 17.2k units. The domestic CV volumes were up 8.1x YoY/23% MoM to ~15.7k units as M&HCV witnessed growth of 585% YoY/39% MoM to ~9.9k units and domestic LCVs witnessed strong 19.3x YoY/3.5% MoM growth to ~5.8k units. New Bada dost launch in LCV segment has aided volume recovery. Exports rose 275% YoY to 1,470 units.

- Eicher Motors' CV segment volumes grew 369% YoY/29% MoM to 7k units.

- Escorts' tractor volumes rose sharply at ~127% YoY/10% MoM growth to 12.3k units. Domestic volumes improved 124% YoY/10% MoM at ~11.7k units while exports stood at 607 units. Volumes were supported by easing supply chain worries as well as strong expectation of a healthy winter crop with increased cashflow for farmers on account of better crop price realisation.

- Mahindra & Mahindra's (M&M) CV segment volumes grew 6.3x YoY/87% MoM at ~17.1k units as LCVs <3.5T grew 89% MoM while LCVs >3.5T grew 85% MoM. Volumes in 3W segment grew 9.6x YoY/89% MoM to 4,461 units.

Tractor dispatches clocked 128% YoY/10% MoM growth to ~31k units as domestic sales rose 122% YoY/10% MoM to ~30k units. With all-time high rabi acreage, investments in rural development schemes, monsoon outlook and demand offtake post rabi procurement will be key monitorables in the upcoming rabi season.

- Tata Motors' domestic CV segment volumes grew 598% YoY/18% MoM to ~37k units. M&HCV sales grew 532% YoY/24% MoM to ~17.8k units. LCV volumes too rose 672% YoY/14% MoM to 19.1k units. Overall export volumes were up 91% YoY/26% MoM to 3.6k units.

Source : Equity Bulls

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