Motilal Oswal Financial Services pointed out that the demand recovery is sustaining across segments such as passenger vehicles (PVs), commercial vehicles (CVs) and two-wheelers (2Ws). Exports, too, seem to have largely bottomed out, though recovery may be gradual. Poddar said that the commodity cost continues to soften which would result in margin expansion.
Even monsoon which was a concerning factor at the start of June was put to rest towards the end as the rainfall deficit turned into surplus. Aamar Deo Singh, Head - Advisory at Angel One underscored that the consumption story with regard to automobiles in India is here to stay amid expected growth in GDP over the next decade. "The shift towards alternative fuels, predominantly electric vehicles (EVs), continues to play a significant role in driving growth.
Further, across-the-board rallies in auto stocks, ranging from two-wheelers to commercial vehicles, also provided a strong base. Going forward, RBI policy towards interest rates is going to be crucial, coupled with monsoon; they are going to play a crucial role in containing inflation, which has the potential to impact auto sales going forward," said Singh. Deepak Jasani, Head of Retail Research at HDFC Securities highlighted the auto sector was witnessing a de-growth since achieving its highs in 2019, which was aggravated during the Covid pandemic.
Post the pandemic, there has been a sharp pick-up in economic activity, Jasani said, adding that chip shortages due to supply constraints also impacted supplies by auto manufacturers. "Once the chip shortage eased, the resultant pent-up demand was supported by aspiring consumers who were seeking their own means of transportation. Interest rates were low and financing
. Read more on livemint.com