After robust H1, auto cos all set to shine in H2 as well; but which stocks should you bet on?
revenue and profits for the six months ended September.
While growth was board based, four-wheeler makers saw revenue growing at a faster pace than two-wheeler makers. This was on the back of a strong volume growth, led by robust demand both in the passenger vehicle and commercial vehicle segments, besides a strong traction in the electric vehicle space.
Profit growth, however, was robust for the sector, aided by the easing pressure on input costs.
On the revenue front, Tata Motors led the growth in the four-wheeler segment, with its consolidated sales rising about 37% year-on-year (YoY) in the six months ended September (H1).
While Maruti Suzuki reported a 23% YoY growth in revenue for H1, Mahindra & Mahindra registered a growth of 19%.
In the two-wheeler segment, both TVS Motor Co and Bajaj Auto reported a 16% growth in the topline, while Hero MotoCorp saw a just 4% rise amid weak volumes.
Eicher Motors’ revenue, which includes both two-wheeler and four-wheeler segments, rose 17%.
The growth in the bottomline was robust, with both Maruti Suzuki and Ashok Leyland seeing their profits more than doubling on year.
TVS Motor, Bajaj Auto, Hero MotoCorp, M&M, and Eicher Motors reported 30-79% growth in the profit for H1.
Meanwhile, Tata Motors returned to black by reporting a profit of Rs 6,967 crore for H1, compared to a loss of Rs 5,951 crore a year ago.
Trajectory For H2
Strong volume growth, better operating leverage benefits, and a healthy profitability drove the performance for automobile companies, particularly four-wheeler makers.
What’s also overwhelming is that H2 has begun well for four-wheeler makers with a strong order book during the festive period.
