Robust car sales in July 2016 supported auto stocks on Tuesday as shares of car maker Maruti Suzuki hit their new all-time high of Rs 5,000 in Tuesday’s trade. The auto major recorded its best ever domestic sales in July at 1,25,778 units, up 13.90 per cent against 1,10,405 units in the corresponding period last year. According to market experts, expectation of above average monsoon and recovery in consumer demand helped auto companies to post strong sales figures in July month.
Tata Motors on Monday registered 7.48 per cent jump in July sales figures to 43,160 units against 40,154 units sold in the same month last year. Two-wheeler major Hero MotoCorp posted 9.13 per cent rise in at 5,32,113 units in July against 4,87,580 units sold in July 2015.
After the strong July sales numbers, Maruti Suzuki and Hero MotoCorp were trading 2.24 per cent and 1.39 per cent higher at Rs 4979.10 and Rs 3264.05 (at 12.15 pm). Auto ancilliary stocks such as Amara Raja Batteries, Motherson Sumi and Gabriel India were also trading higher by 1.50 per cent, 0.89 per cent and 8.78 per cent, respectively, at the same time. The BSE Auto index was up 0.63 per cent at 21,324.48.
However, Tata Motors and Ashok Leyland were trading lower by 0.06 per cent and 3.38 per cent, respectively. Bajaj Auto and TVS Motor were trading higher by 0.53 per cent and 0.61 per cent, respectively. Mahindra and Mahindra was up by 0.30 per cent. M&M posted a 14 per cent year-on-year increase in total sales to 39,458 units in July.
Brokerage firm Sharekhan has hold rating on Gabriel India shares. It believes revenues of Gabriel are likely to grow at a healthy 13 per cent CAGR, underpinned by the improved outlook for the two-wheeler segment and higher share of revenues from the passenger car segment.
On Maruti Suzuki, Vinod Nair, head of research, Geojit BNP Paribas said, “Maruti Suzuki will benefit with the passage of GST Bill.”
Ashok Leyland recorded a 5 per cent fall in total sales at 10,492 units in July, 2016. Edelweiss has ‘Hold’ rating on Ashok Leyland shares with target price of Rs 110.
According to Nirmal Bang Institutional Equities, automobile sales in July 2016 were strong as most of the major players in two-wheeler and car segments reported good year-on-year growth. Market leaders such Hero MotoCorp and Maruti Suzuki India posted better-than-expected sales while other players also reported good YoY growth backed by improvement in demand.