Share prices of Hero MotoCorp Ltd, TVS Motor Company Ltd, Bajaj Auto Ltd with gains of 1-4.5% scaled 52-week highs on Wednesday. Sentiments about two-wheeler manufacturers improved led by strong festive season sales. The S&P BSE Auto Index rose nearly 10% in November as all car sales are believed to have picked up during the festival season.
For the two-wheeler manufacturers, retail sales will grow 9-11% year-on-year in November 2023, led by strong demand in the first half of the month, where volumes grew 14-16% year-on-year. , said analysts at Motilal Oswal Financial Services.
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The holiday season sales remained strong. Himanshu Singh Research analyst at Prabhudas Lilladher pointed out that rural sales turned out to be stronger than expected. Sales in the northern region were strong. The election season also helped boost demand in North and Central India, while the wedding season further drove overall sales.
As the pickup in Two-wheeler sales remains positive for all OEMs (Original Equipment Manufacturer), Hero MotoCorp should see higher benefits with a strong entry-level portfolio. Himanshu said that the channel’s inventory for Hero MotoCorp needs to be reduced to 4-5 weeks compared to the channel’s normal inventory of 7-8 weeks of sales that Hero MotoCorp dealers maintain.
Sales are likely to remain strong during the month of December as well. The strong wedding season is keeping sales momentum strong feels Himanshu Singh.
Analysts at Motilal Oswal Financial Services believe that demand has improved in almost all regions and traders expect the momentum to continue, especially in the northern zones, as demand is further supported by the wedding season.
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Meanwhile, analysts also believe that although the two-wheeler manufacturers will report strong November sales, overall sales numbers in December may not reflect the strong sales if manufacturers resort to channeling and liquidating old models before the new year. However, in such a case, January will see a good Singh feels a start.
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions
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Updated: 29 Nov 2023, 15:32 IST