Hero MotoCorp, Eicher Motors fall despite strong August sales

The Nifty Auto index suffered a decline of more than 3 per cent on Wednesday, driven by a renewed surge in crude oil prices due to heightened tensions between the US and Iran. Despite strong August sales reported by automakers and optimistic demand commentary from brokerages, Hero MotoCorp and Eicher Motors emerged as the steepest losers, plummeting by 6-7 per cent.

Other automakers such as Bajaj Auto, Mahindra & Mahindra, Uno Minda, Ashok Leyland, TVS Motor, Maruti Suzuki, and Bharat Forge also traded in the red. Auto demand momentum remained robust in August, with registrations up 24-29 per cent year-over-year for two-wheelers, passenger vehicles, and trucks, while tractors grew 3 per cent year-over-year.

Wholesale sales for passenger vehicles and trucks surged by 36-43 per cent year-over-year, and 10 per cent for two-wheelers and tractors, respectively. Wholesale sales for TMPV rose by 56 per cent year-over-year, while those for Ashok Leyland, Mahindra & Mahindra, Bajaj Auto, Maruti Suzuki, and TVS Motor increased by 10-43 per cent year-over-year.

Wholesales for Eicher Motors (RE) and Hyundai grew by 3 per cent year-over-year. Comparatively, Jefferies' August wholesale estimates were met for Maruti Suzuki, Hero MotoCorp, and Hyundai, while they were exceeded for the rest. Nomura noted that strong demand continued, with TMCV and Bajaj Auto outperforming, while Maruti Suzuki, Hyundai, and TVS Motor lagged due to supply constraints.