Domestic automobile industry is expected to log a 17% year-on-year revenue growth in the June quarter of FY24, a report said on Tuesday. This estimated growth will be led by healthy growth across segments, barring muted growth in battery companies, brokerage firm Emkay Global said in its report.
The revenue growth projections are excluding Tata Motors, it said.
Segment wise, the report said, the domestic two-wheeler industry’s volumes are likely to have improved by around 10 % Year-on-Year (YoY) in Q1, primarily on account of continued and healthy demand from the urban/premium segment.
However, the two-wheeler exports remained weak on a year-on-year basis while sequential improvement was recorded for larger volume players, it said.
The overall revenue is expected to grow at 24%, 19% and 16% amid volume growth of 10%, 5% and 21% for Bajaj Auto, TVS Motors and Eicher Motor-Royal Enfield, respectively, Emkay Global said.
It also said that the revenue growth for Honda Motorcycle is expected at 6%, amid a volume decline of 3%.
Continued price hikes would lend support to authorised service providers on a sequential basis, it said, adding, for Bajaj Auto, Emkay Global expects a 7 % quarter-on-quarter decline in authorised service providers, given a lower share of three-wheelers during the quarter.
The domestic passenger vehicle industry’s volumes is expected to have grown by around 8% year-on-year in the June quarter amid a ramp-up in production and continuing interest in SUVs, as per the report.
The expectation is nearly 17% revenue growth for market leader Maruti Suzuki, backed by 6% higher volumes while Mahindra & Mahindra’s auto division is expected to post around 33% revenue growth (overall growth of 24 %), driven by 21 % higher volumes.
For Maruti Suzuki, the brokerage house expects continued margin improvement on a quarter-on-quarter basis (despite 3% lower volumes) on account of ongoing improvement in the product mix and price hikes, it said.
The domestic commercial vehicle industry’s volumes declined by around 5% YoY, the report said.
But the sequential decline was placed much higher at around 23 % due to usual seasonality and some preponement of demand in the last quarter of the previous fiscal because of real driving emission/on-board diagnostic-2 norms coming into effect from April this year.
Among their coverage universe, Emkay Global expects a revenue jump of 9% for Ashok Leyland (+4% volumes) and 16% for Eicher Motor-Volvo Eicher CV (+12% volumes), it said.
According to the report, the domestic tractor industry’s volumes fell by around 2% YoY on a high base and delayed monsoon in certain regions.
Emkay Global said it expects 11% and 8% revenue growth for Escorts and M&M, respectively.
