Ahead of auto sales data to be declared on Saturday (September 1, 2018), global research firm Nomura has said that it expects flat sales for passenger vehicles and two-wheelers.
Having said that, it expects medium and heavy commercial vehicles to report single-digit growth in the month of August.
Nomura is also expecting the floods in Kerala to have an impact on sales, especially in case of passenger vehicles as well as two-wheelers.
It expects Maruti and Royal Enfield to see worse-than-expected impact due to high exposure to Kerala. But, the overall rural demand momentum remains healthy.
The brokerage house is also maintaining 2-wheeler estimates of over 10% industrial growth in FY19F.
Among stocks, it remains positive on Hero MotoCorp, while Maruti Suzuki is its long term top pick in the sector.
Meanwhile, Bajaj Auto’s two-wheeler growth is likely to remain strong at 22% YoY. It also expects TVS’ domestic volume growth to decline 3% YoY due to fall in moped sales.
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