Moneycontrol Bureau
Auto companies kicked off the financial year 2014-15 on a strong note by reporting good sales growth in April. Auto shares rallied 2-6 percent intraday on Monday.
Maruti Suzuki, the biggest car maker by sales, has continued to outperform industry due to robust sales in Ciaz and the new Alto. The company normalised its inventory levels to 4 weeks against 3 weeks earlier, which aided sales growth. Sales in April jumped 29.6 percent year-on-year to 1.11 lakh units with export sales rising 56 percent and domestic sales growth of 27.3 percent.
Utility vehicle maker Mahindra & Mahindra has seen some respite as auto sales accelerated in the month gone by but tractor sales continued to slowdown. Total sales grew by 1.2 percent to 36,727 units while tractor sales fell 13 percent to 18,011 units.
In case of Tata Motors, the recovery in passenger vehicle sales continued on good response to new launches Bolt and Zest but its commercial vehicle (CV) sales continued to fall. Sales grew by 7 percent with exports rising 18 percent and domestic sales growth of 5 percent while CV sales fell 5 percent. Its UK subsidiary Jaguar and Land Rover clocked 14.8 percent growth in April sales.
Ashok Leyland, the country's second largest commercial vehicle maker, reported strong sales growth of 43 percent in April as its medium and heavy commercial vehicle sales jumped 45 percent and light commercial vehicle sales increased by 37 percent.
In two-wheeler space, Bajaj Auto (after 4 months of falling sales) finally saw a rebound in April. Total sales rose 1 percent Y-o-Y at 3.36 lakh units following a degrowth of 18 percent in March sales, 22 percent decline in February sales, 8 percent fall in January and 3 percent slip in December sales.
Its rival TVS Motor Company clocked decent double digit growth on big boost from three wheeler sales. Sales increased by 14 percent with 18 percent growth in exports, 13 percent in 2-wheeler sales, 15 percent in scooters and 48 percent in 3-wheeler sales. However, Hero Motocorp disappointed street as weak trend continued due to slowdown in rural demand. Total sales in April fell 6.6 percent to 5.33 lakh units.
Royal Enfield (owned by Eicher Motors) recorded strong sales growth of 42.4 percent in its total April sales while Steel Strips, the wheel maker, reported a 12 percent growth in wheel rim sales.
At 13:16 hours IST, the scrip of Maruti Suzuki India was quoting at Rs 3,775, up 1.15 percent after hitting a life high of Rs 4,031 on the BSE. Ashok Leyland jumped 2.5 percent while Bajaj Auto, TVS Motor Company and M&M rallied 4-5 percent.
Eicher Motors, Hero Motocorp and Steel Strips Wheels rose 0.6-1.8 percent whereas Tata Motors fell over a percent.
Posted by Sunil Shankar Matkar
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