M&M, TVS & Uno Minda among top picks by Nuvama ahead of December auto sales

Nuvama analysts said December is expected to bring encouraging results for the industry. PVs are predicted to achieve double-digit growth, propelled by strong performances from M&M, Maruti & Toyota

December Auto Sales: With 2024 nearing its end, domestic brokerage firm Nuvama Institutional Equities (Nuvama) has revealed its top picks in the auto sector ahead of forthcoming auto sales December 2024 figures. The auto sales data will be announced on January 1, 2025. 

 

Among the companies garnering attention are Mahindra & Mahindra (M&M), TVS Motor, Eicher Motors-Royal Enfield, SAMIL, and Uno Minda.

 

According to analysts, the final month of 2024 is expected to bring encouraging results for the industry. Passenger vehicles (PVs) are predicted to achieve double-digit growth, propelled by strong performances from Mahindra & Mahindra, Maruti Suzuki India Limited (MSIL), and Toyota. Tractors, analysts reckon, are also likely to maintain their upward trajectory, buoyed by favourable customer sentiment and a supportive base.

 

 

In the two-wheeler (2W) segment, leaders like Eicher Motors-Royal Enfield and TVS Motor are anticipated to outperform their peers, while commercial vehicles (CVs) are expected to remain flat. However, Ashok Leyland (AL) is projected to lead the charge within the CV category.

 

“Over FY24–26E, we believe 2W/tractor volumes would grow in high single digits vis-à-vis low-single digits for PV and CV. The top picks in our coverage are M&M, TVS Motor, Eicher Motors-Royal Enfield, SAMIL and Uno Minda,” said Raghunandhan NL, Manav Shah and Rahul Kumar of Nuvama, in a note.

 

Here’s the segment-wise expectations ahead of December auto sales data:

 

The passenger vehicle (PV) segment is expected to show strong growth, with volumes projected to rise approximately 10 per cent year-on-year (Y-o-Y) in the domestic market, on the back of higher year-end incentives boosting demand, according to analysts at Nuvama.  

 

Mahindra & Mahindra (MM), Maruti Suzuki India Limited (MSIL), and Hyundai are likely to record growth, while Tata Motors Passenger Vehicles (TTMT-PV) is expected to see a decline. 

 

M&M-Auto, which includes PV, commercial vehicles (CV), and three-wheelers (3W), is forecasted to achieve a 13 per cent Y-o-Y growth, reaching 67,900 units. Maruti Suzuki is expected to post a 13 per cent Y-o-Y increase to 155,000 units, while Hyundai's volumes are likely to grow 1 per cent YoY to 57,000 units. 

 

On the other hand, TTMT-PV is anticipated to face a 6 per cent decline, with volumes dropping to 41,100 units. Elevated blended discounts from original equipment manufacturers (OEMs) are noted as an effort to stimulate demand, analysts said.

 

In the tractor segment, industry volumes are projected to deliver a healthy performance, rising approximately 5 per cent Y-o-Y in the domestic market. Positive farmer sentiment, driven by improved Kharif crop production and favourable trade terms, analysts believe, supports this growth. M&M Farm is forecasted to achieve a 7 per cent Y-o-Y increase, reaching 20,500 units, while Escorts (including Kubota) is expected to grow 2 per cent Y-o-Y, with total volumes going up to 6,250 units.

 

For the two-wheeler (2W) segment, volumes are likely to see marginal growth, with a 1 per cent Y-o-Y increase in the domestic market, supported by a strong festive season, Nuvama analysts said in a note. Export volumes are anticipated to grow in double digits, driven by demand in Latin America and Africa. Eicher Motors-Royal Enfield (EIM-RE) is expected to report a strong 21 per cent Y-o-Y growth to 77,000 units. 

 

TVS Motor is forecasted to grow by 9 per cent Y-o-Y to 330,000 units, and Bajaj Auto is projected to post a 4 per cent Y-o-Y increase to 340,000 units. However, Hero MotoCorp may face a 6 per cent Y-o-Y contraction, with volumes declining to 370,000 units.

 

In the commercial vehicle (CV) segment, industry volumes are anticipated to remain flat Y-o-Y in the domestic market. Positive indicators, such as higher E-Way Bill generation compared to last year, suggest improved freight availability for transporters. 

 

Performance among OEMs is expected to vary, with Ashok Leyland forecasted to grow 2 per cent Y-o-Y to 16,600 units and Eicher Motors-Volvo Eicher Commercial Vehicles (EIM-VECV) remaining flat at 8,000 units. However, TTMT-CV is projected to see a slight decline of 1 per cent Y-o-Y, with volumes dropping to 33,900 units.