Eicher Motors to Maruti Suzuki: Auto stocks race on December sales boost

Eicher Motors said it has launched some category-defining motorcycles through the year and it is encouraging to see the response to its recently launched motorcycles both in India and int'l markets.

Shares of automobile companies rose for the second consecutive day, with Eicher Motors, Maruti Suzuki India (MSIL), Ashok Leyland, and Mahindra & Mahindra (M&M) surging between 4 per cent and 9 per cent on Thursday. The companies reported better-than-expected sales for December 2024. Bajaj Auto, TVS Motor Company, and Hero MotoCorp ended the day with gains of 3-4 per cent.

 

The BSE Auto and Nifty Auto indices were the top gainers among sectoral indices, rising about 3.6-3.8 per cent, outpacing the 1.8 per cent increase in the BSE Sensex. Over the past two days, the auto index has rallied by 5 per cent. In December, the index had underperformed the market with a 2.3 per cent decline.

 

 

Among individual stocks, Eicher Motors hit a record high of Rs 5,308 at the close, rallying 9 per cent after the company reported a 25 per cent year-on-year (Y-o-Y) increase in total motorcycle sales, reaching 79,466 units in December 2024.

 

International business saw a 90 per cent growth with 17,575 units sold. The stock surpassed its previous high of Rs 5,104.5 on September 27, 2024. The management indicated that the response to recently launched motorcycles in both Indian and international markets had been encouraging.

 

Shares of Ashok Leyland rose by 5.9 per cent to Rs 232.9 amid heavy volumes after the company reported a 5 per cent Y-o-Y increase in total sales, reaching 16,957 units in December. Medium and heavy commercial vehicle sales grew by 11 per cent Y-o-Y, with 9,238 units sold. Average trading volumes at the counter more than doubled, with a combined 8.82 million equity shares traded on the NSE and BSE.

 

On December 13, 2024, Ashok Leyland announced a price increase of up to 3 per cent on its entire range of commercial vehicles (CVs), effective January 2025.

 

Within the CV space, volumes are starting to recover due to a resurgence in construction and mining activities after the monsoon. Tata Motors’ sales, although declining Y-o-Y, saw a healthy sequential growth of 22.6 per cent month-on-month, led by the bus segment. ICICI Securities expects CV volumes to improve due to a pick-up in government capital expenditure.

 

Meanwhile, M&M surged 4 per cent to Rs 3,210, gaining 7 per cent in two days after reporting robust growth in tractor volumes. The stock is nearing its record high of Rs 3,221.1 from September 27, 2024. The company posted an overall sales growth of 16.9 per cent to 92,711 units, with utility vehicle sales, including pick-ups, growing 17.2 per cent.

 

Total tractor sales (domestic + exports) increased 19.9 per cent to 22,943 units in December, compared to 19,138 units during the same period last year.

 

MSIL vrooms 9 per cent in two days

 

Shares of MSIL jumped nearly 5.5 per cent to Rs 11,837.5, rising 9 per cent over two days after the company reported stronger-than-expected sales for December.

 

In December, MSIL’s total sales grew 29.6 per cent Y-o-Y to 178,248 units, compared to 137,551 units a year ago. Passenger vehicle sales increased 28.6 per cent to 62,788 units, up from 48,787 units in the previous year.

 

On the production front, MSIL also reported a Y-o-Y increase, with total production rising to 157,654 units from 121,028 units. PV production rose 30.15 per cent to 155,553 units from 119,518 units last year.

 

Motilal Oswal Research highlighted Maruti Suzuki’s impressive performance, with volumes surpassing expectations at 178,000 units.

 

Global brokerage Citi has maintained a ‘buy’ rating on MSIL with a target price of Rs 13,500 per share.

 

Centrum Research has also recommended a ‘buy’ rating, praising MSIL’s consistent new launches, export expansion (highlighted by reaching 3 million cumulative exports), and efforts to normalise inventory levels.