The S&P BSE Auto index scaled an all-time high of 39,774.93 on November 29 after record vehicle sales during the festive season set off a bull run for auto stocks.
The index has given a return of 36.54 percent year-to-date, beating the 9 percent return churned out by the benchmark Sensex.
According to the Federation of Automobile Dealers Associations (FADA), vehicle sales surged 19 percent over the last year to 37.93 lakh in the festive period this year.
On November 28, FADA released the vehicle retail data for the 42-day festive period from October 15, first day of Navaratri to November 26, 15 days after Dhanteras.
The sale of two-wheelers, three-wheelers, commercial vehicles and passenger vehicles recorded growth rates of 21 percent, 41 percent, 8 percent, and 10 percent, respectively, though the tractor segment slowed down by 0.5 percent, according to FADA.
The record sales have also kept brokerages upbeat on the auto segment about growth expectations for the rest of the financial year. They expect the festive season sales and lower commodity cost to benefit automakers.
According to Elara Capital, the 67-day festive season sales,(they calculate from Ganesh Chaturthi to 15 days after Dhanteras) makes up 20-25 percent of the annual retail sales.
Nomura expects the wholesale number for two-wheelers to grow by 25 percent on-year in November, benefitting from Diwali and inventory down to less than four weeks. The brokerage also estimates the two-wheeler segment to clock a 10 percent growth in FY24. Elara Capital too pegs the wholesale volume growth for two-wheelers at 10 percent for FY24.
For passenger vehicles, which grew slower than two-wheelers, Nomura forecasts a 6 percent YoY growth in FY24. They said that after the festive season, automakers have to reduce production for the first time since Covid days as PV dealers still have high inventory levels. The foreign brokerage also expects discounting to clear the excessive stock.
The medium and heavy commercial vehicles are also expected to have good growth demand on the back of infrastructure spending. Nomura estimates 10 percent/5 percent volume growth for FY24/25 for MHCVs.
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