BSE Auto index hits 21-month low; Bajaj Auto, TVS Motor at 52-week low

The S&P BSE Auto index hit its lowest level since 27 December 2016, has fallen 20% since September 2018, as compared to 11% decline in the S&P BSE Sensex.

Shares of automobile companies continued trading lower with the S&P BSE Auto index hitting the 21-month low on concern of the decline in volumes, on the back of higher product prices and running costs.

At 10:38 am; the S&P BSE Auto index was trading 0.52% lower at 19,871, as compared to 0.09% decline in the S&P BSE Sensex. The auto index hit an intra-day low of 19,627, recorded its lowest level since December 27, 2016.

Since September 2018, the S&P BSE Auto index tanked 20% against 11% fall index benchmark index. The month of September has been muted for passenger vehicles due to factors such as low consumer buying sentiment, high fuel prices and the effects of monsoon in many parts of the country.

Bajaj Auto, Maruti Suzuki India, TVS Motor Company, Escorts and Tata Motors have hit their respective 52-week lows on the BSE in early morning trade today.

“For July-September quarter (Q2FY19), volume growth for auto companies varied across segments as 4Ws and tractors came in flat YoY while 2Ws and CVs registered double-digit YoY volume growth despite a mismatch in the festive season, resulting in moderate revenue growth of around 9% YoY,” Prabhudas Lilladher said in the earnings preview.

With commodity prices continuing to inch northwards, along with lower operating leverage and insufficient pricing action taken by the companies, we expect an EBITDA decline of around 15% YoY, resulting in net profit decline of around 28% YoY (up around 16% QoQ), the brokerage firm said.

“There has recently been a circular from the Insurance Regulatory and Development Authority (IRDA) regarding the increase in the personal accident cover for two-wheelers, which if implemented, is likely to increase the cost to the customer. The Society of Indian Automobile Manufacturers (SIAM) has already taken up the matter with IRDA for a review, and we are hopeful of a positive outcome,” Hero MotoCorp said in a press release.

With the peak festival season coming up in the months of October and November, the Company is confident of setting yet another global benchmark in retail sales during the period this year, it added.

“With all players pumping in inventory before the start of the festive season, retails in October would be key for both 4Ws & 2Ws to ascertain consumer sentiment and demand. We expect growth momentum for the CV and Tractor segment to continue over the festive season,” analysts at Prabhudas Lilladher said in an auto sector update.

COMPANY	LATEST	ONE-MONTH BEFORE	LOSS(%)
ESCORTS	580.80	797.65	-27.19
EICHER MOTORS	21507.55	28651.25	-24.93
FORCE MOTORS	1756.30	2338.20	-24.89
MOTHERSON SUMI	228.00	303.50	-24.88
TATA MOTORS	215.80	277.50	-22.23
TATA MOTORS-DVR	116.60	148.05	-21.24
MARUTI SUZUKI	6890.90	8732.55	-21.09
MINDA INDS.	320.05	405.30	-21.03
M & M	769.40	973.45	-20.96
ENDURANCE TECH.	1180.55	1476.25	-20.03
MINDA CORP	120.55	148.80	-18.99
TVS MOTOR CO.	488.10	590.55	-17.35
ASHOK LEYLAND	109.85	131.75	-16.62
HERO MOTOCORP	2792.65	3327.45	-16.07
TIMKEN INDIA	565.00	664.90	-15.02
BAJAJ AUTO	2553.70	2924.00	-12.66
EXIDE INDS.	245.30	279.30	-12.17
AMARA RAJA BATT.	719.80	816.85	-11.88
BOSCH	18948.00	21343.25	-11.22