Auto stocks are seeing a rise on January 3, i.e. in today’s business, on the basis of better sales figures than expected for the month of December. At present, around 12.05 pm, the Nifty Auto Index is trading with a gain of 1.5 per cent, while the Sensex is trading at 58,837.42 with a gain of 583.6 points or 1 per cent. On the other hand, Nifty is seen at the level of 17,522.45 with a strength of 168.40 points or 0.97 percent.
In today’s early trade, Eicher Motors Ltd was trading with a gain of 4 percent, Tata Motors about 2.2 percent, Ashok Leyland 1.6 percent, Hero MotoCorp 1.2 percent and Bajaj Auto, TVS Motors, Maruti Suzuki India with a gain of about 1 percent.
Motilal Oswal, in his note on the auto sector, has said that the passenger vehicle segment has got support due to the improvement in the supply of semi-conductors, but the two-wheeler segment is yet to recover due to rising costs. Keeping this in mind, we are giving more preference to 4 wheeler segment than 2 wheeler keeping in view the increasing demand and stable competitive environment. The momentum is expected to continue in the commercial vehicle cycle.
We advocate betting on companies that have high growth potential, which will benefit the most from rising demand and have the strongest balance sheets.
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It is worth noting that in December, Royal Enfield has sold 74,000 units, which is 43 percent more than the previous month. This growth in the company’s sales was seen in the situation when the company’s new launches have been affected due to problems in the supply of semiconductors.
In the month of December, Eicher Motors’ 350cc motorcycle sales grew by 44 percent on a quarterly basis and stood at 62.5 thousand units. During this period, the company’s exports saw a jump of 50 percent.
In the month of December, Tata Motors has become India’s second largest passenger vehicle seller, beating Hyundai Motors India. This is the first time in nearly a decade that this has happened. In the electric vehicle segment too, Tata Motors’ sales have grown by about 44 per cent year-on-year.
Auto Analyst believes that with the new launch of Tigor EV, the company’s EV sales can see further growth. Apart from this, the recently launched SUV Punch will increase the company’s ICE (Internal Combustion Engine) market share.
Maruti Suzuki has seen a 10 percent increase in dispatches on a month-on-month basis in the month of December. Despite the chip shortfall, the company’s production has increased in the month of December. Similarly, in December, the sales of Hero MotoCorp have seen an increase of 13 per cent while that of TVS Motors has decreased by 8 per cent. TVS Motors’ domestic sales declined by 17 per cent in December while exports grew by 8 per cent.