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Last Updated : Jun 02, 2016 02:01 PM IST | Source: CNBC-TV18

How Religare Cap sees May auto sales numbers

In an interview with CNBC-TV18, Mihir Jhaveri, Auto Analyst, Religare Capital Markets, gave his take on May auto sales data that came out yesterday.

In an interview with CNBC-TV18, Mihir Jhaveri, Auto Analyst, Religare Capital Markets, gave his take on May auto sales data that came out yesterday.

Below is the verbatim transcript of Mihir Jhaveri’s interview with Ekta Batra & Anuj Singhal on CNBC-TV18.

Ekta: First wanted to start with Tata Motors, domestic sales looked quite lack lustre but I think the cherry on the cake was Jaguar Land Rover (JLR) sales, the retail sales in the US which was up around 8 percent odd. How did you read it and your sense in terms of what the trajectory could be also going forward?

A: For Tata Motors, the domestic business - passenger cars -- has not been doing well. So, they are seeing that decline which is there. However, if you see the commercial vehicle (CV) side they have started to pick up so, CV has done well for them this month as well. As far as JLR is concerned, US numbers did not show significant growth. The Land Rover has seen a decline. Overall it is an 8 percent growth, but Land Rover has seen some decline.

Though it is because of the lower retail inventory which has been the reason mentioned by the company and things should look better probably from second half is what they think for US retail. So, overall Jaguar brand is doing very well because of the new launches of XE and F-Pace so, that will continue. We hope that Land Rover also starts picking up which will push the overall volumes for US sales in the coming months or quarters.

Anuj: The big number of course the big market disappointment was from Ashok Leyland. What is your first reaction to the sales number and of course this is a stock which has done remarkably well all through last one year do you think it was bit on an aberration?

A: It looks like it is a bit of an aberration because Tamil Nadu had elections and there was a day which was off coupled with some postponement of buying would have happen because of elections getting over and results coming out. Things should normalise from probably next month onwards.

We are also hearing that discounts by the competitors have increased higher, so probably that could also be one of the factors where the volumes have gone down but we believe that next month onwards probably it should normalise.

Ekta: Where you disappointed by what Bajaj Auto reported and their guidance for June and July is also tepid but that is also because of seasonality?

A: It is seasonality and anyways we thought it will do around 3 percentage points higher. They have done around 1 percent. The domestic growth has come in, so I think a bit disappointment but not a major one in that sense.

Ekta: Maruti Suzuki is up around 7 percent odd for the month of May. What are you projecting for the coming months?

A: We don’t do monthly projections at least at the start of the month so we will take the feedbacks and then do it. However, Maruti, expectation was on that double digit number but it has come in single digit, so exports have seen a decline. So in that sense it was also a bit disappointing. Therefore, on net-net basis, auto volumes have been a little bit tepid, barring some green shoots like tractors doing well and CVs which are continuing to do well.

Anuj: Eicher Motors, how are you approaching that?


A: Eicher Motors was largely in line. In motorcycle segment we had an estimate of around 38-39 percent growth; it has come in largely there. While the Volvo Eicher Commercial Vehicles (VECV) has done very well so VECV numbers has been very strong for them. There also they are seeing some pickup which is happening and gaining some market share. So VECV was good and motorcycles were largely in line.

Ekta: In terms of the other two-wheelers we have spoken about Bajaj Auto but what about TVS Motor Company as well as Hero Motocorp? TVS Motors seems to have outperformed the entire two-wheeler space first time?

A: TVS has been doing that and new launches are there which are doing pretty well. So, TVS's double digit growth is a good sign. Most of it has come from scooters, so the scooters growth has been 20 percent. So, TVS because of the new products and launches is doing well.

Hero, again we will have to check the details, they are not yet out but overall our expectation was around 3 percent growth for this month and it has come around 2 percent. So, marginal disappointment from Hero as well but TVS Motor has done pretty well.

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First Published on Jun 2, 2016 12:51 pm
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