Shares of automobiles companies are in top gear with the S&P BSE Auto and Nifty Auto index gaining more than 1% after Maruti Suzuki and Eicher Motors reported a good set of sales numbers in the month of July.
At 12:21 pm; the S&P BSE Auto index (up 347 points or 1.4%) and Nifty Auto index (up 140 points or 1.3%), the largest gainers among sectoral indices, were up by more than 1% each, trading at their record high levels. By comparison, S&P BSE Sensex and Nifty 50 index were up by marginally 0.06% and 0.14%, respectively.
Maruti Suzuki India, TVS Motor Company, Eicher Motors and Maharashtra Scooters have hit their respective record highs on the BSE.
Maruti Suzuki India was up 3% to Rs 7,920 on BSE intra-day trade, after the country’s largest car maker clocked a growth of 22% in sales to dealers last month. The company sold 153,298 passenger vehicles in the domestic market last month against 125,764 units in July 2016.
Motilal Oswal Securities, the domestic brokerage firm, was expected 11% YoY growth in domestic dispatches.
Eicher Motors too up nearly 3% to Rs 30,820, after the company said that July sales of Royal Enfield zoomed 21% to 64,459 units compared with 53,378 Units in the year ago period.
“Two-wheelers (2Ws) and passenger vehicles (PVs) wholesales volume is expected to be healthy, led by inventory build-up to meet festive demand and gradually improving retails post Goods & Service Tax (GST) implementation. Growth in the commercial vehicles (CVs) segment will be largely led by LCVs,” Motilal Oswal Securities said in July, 2017 sales estimates.
“We prefer four-wheelers (4Ws) over 2Ws and CVs due to stronger volume growth and a stable competitive environment. While we expect 2W volumes to benefit from rural recovery in the near term, competitive intensity remains high in this segment witnessing changing customer preferences. For CVs, we expect a gradual volume recovery from 2HFY18 (October-March),” added report.