According to Nomura, since we are entering a period of very low base from last year, for some categories in the auto industry growth rates would look very high in November
The path of volume recovery in Indian auto sales is likely to continue in November 2014 with improvement in growth rates across segments, says Nomura. It said, "Since we are also entering a period of very low base from last year, for some categories the growth rates would look very high."
For passenger vehicle industry, Nomura says it expects around 6% growth in November volumes. "We expect Maruti Suzuki India Ltd (MSIL) to outperform industry growth in November with about 8% growth led largely by the success of its recent new launches – Ciaz, Alto K10 and Celerio. Mahindra & Mahindra (M&M) will likely see around 3% growth on a lower base and pick-up in Scorpio volumes. Among unlisted original equipment manufacturers (OEMs), Honda, Hyundai and Toyota will likely see double-digit volume growth while other OEMs like Ford, General Motors (GM) and Renault should continue to see volume declines, in our view," it said in a research note.
Nomura expects a 9% growth in two-wheeler volumes in November. It said, "In terms of OEMs, Bajaj Auto will likely report 11% volume, helped partly by the lower base effect as its volumes declined by 28% in November 2013. Hero MotoCorp (HMCL)’s volumes will likely be up about 1%. We expect 14% volume growth for Honda Motorcycles and Scooters India Ltd (HMSI). TVS will likely report another month of strong growth, up 35%, led by robust performance in the scooters segment and improvement in bike volumes."
According to the research note, volumes in the medium and heavy commercial vehicles (MHCV) segment are likely jump 39% in November, partly helped by the lower base effect as well. "In terms of OEMs," it said, "Ashok Leyland will likely report the strongest growth of about 91% led by the lower base effect as volumes were down about 40% in November 2013. We expect around 35% growth in Tata Motors’ domestic volumes while Eicher will likely report about 21% volume growth, as per our estimates. Light commercial vehicle (LCV) industry volumes are likely to remain weak and drop by about 10% in November this year."
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