SML Isuzu surges 18% on product price hikes; healthy March sales

The company has decided to increase prices of its products (across all models - trucks & buses) by 3-4 per cent, effective from today i.e. April 4, 2022.

Shares of SML Isuzu moved 18 per cent higher to Rs 697 on the BSE in Monday’s intra-day trade after the company said it has decided to increase prices of its products (across all models - trucks & buses) by 3-4 per cent, effective from Monday, April 4, 2022.

While the company is taking actions to absorb the impact of sharp increase in commodity prices and other input costs, the upward revision has been necessitated to partially offset the impact of increased costs, SML Isuzu said in an exchange filing.

Meanwhile, the company’s total sales increased 43 per cent to 1,363 units in the month of March 2022. Passenger vehicles sales more-than-doubled to 665 units from 273 units in March 2021. However, cargo vehicles sales rose 3 per cent to 698 units from 679 units in a year ago.

SML Isuzu is primarily engaged in the business of manufacturing of commercial vehicles and related components.

Domestic commercial vehicles industry (CVI), which was already in the midst of a downcycle, witnessed sharp volume contraction during FY2020-21 (FY21) as the Covid-19 pandemic added to its woes.

Due to closure of schools & educational institutions and negligible tourist operations throughout the year and work from home culture adopted by most of the corporates, demand for buses has been impacted severely.

The demand for trucks is likely to gain momentum with gradual pick-up in economy, construction & infrastructure activities, normal monsoon and last-mile transportation. Analysts believe the situation will normalise from Q1FY23 onwards with healthy double digit volume growth expected in FY23E at around 12 per cent YoY for overall automobile industry. It will be broadly aided by low base following three years of decline, favourable demographics, expected economic growth and a renewed focus on personal mobility.