M&M, Tata Motors and Sona Comstar are the top winners today

  • Shares of automakers led gains on Monday, expecting strong selling in July.
  • Analysts expect the auto industry to see double-digit growth in FY23, supported by lower raw material and fuel prices.
  • Most companies will release their monthly sales figures for July this week.
  • M&M and Tata Motors are the top two winners on Sensex and Nifty 50.

Indian markets started the week on a high note, as auto stocks rose on expectations of strong sales data in July.

Most companies will release their monthly sales figures for July this week, which will provide information on rural demand and the impact of inflation on the economy. Analysts have a positive view of the recovery in demand in rural areas.

Improved supply of semiconductor chips, favorable monsoon and upcoming festive seasons to bring expected relief.

“We expect industry volume to gradually improve on a monthly basis over the next 3-4 months, supported by a favorable monsoon-led rural recovery and the start of the festival season in 2QFY23. We expect retail demand to remain strong in FY23 Ongoing global geopolitical issues amid the Russia-Ukraine war are negatively impacting the business environment, creating a sense of negative demand for consumption,” said a report from Reliance Securities.

CRISIL analysts believe that passenger and commercial vehicles will drive volume growth in FY23, with two-wheelers showing a moderate recovery and demand for tractors remaining subdued.

Lower commodity prices and stable fuel prices should also provide support.

“We expect the automotive industry to experience double-digit growth in FY23, while we expect the medium and heavy commercial vehicles and three-wheeler segments to outperform with volume growth of more than by 30% in FY23,” the report said.

Sales data from two-wheeler and rickshaw maker Bajaj Auto point to some pain in the two-wheeler market. Its total sales fell 4% while its two-wheeler sales fell 5%; even though its commercial vehicle sales increased by 3%.

Meanwhile, total Maruti Suzuki sales increased 8% year-on-year to 175,916 units and domestic sales increased 10% to 155,605 units in July 2022. However, the automotive major said that “ the shortage of electronic components had a minor impact on vehicle production, mainly in domestic models.

Maruti’s mid-size models like Ciaz and SUV models like Ertiga, S-Cross, XL6, Brezza saw lower sales in July compared to last year.

Top winners on Nifty Auto % change today
M&Ms 6.4%
Tata Motors 4.7%
Sona Comstar 4.5%
Ashok Leyland 3.2%
Maruti-Suzuki 2.3%
LIM 2.3%
Balkrishna Industries 2.2%
TVS engine 1.6%

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