Two auto stocks touch 52-week highs; have zoomed up to 30% in two days

SML Isuzu zoomed 30 per cent, while Atul Auto rallied 28 per cent in the last two days after the companies reported a sharp surge in total monthly sales for March

Shares of SML Isuzu and Atul Auto have rallied by up to 30 per cent in the past two trading days. The stocks hit their respective 52-week highs in Wednesday’s intra-day trade on reporting healthy March auto sales numbers.

SML Isuzu surged 8 per cent to Rs 954.95 on the BSE in intra-day trade on Wednesday, zooming 30 per cent in over last two sessions. The stock of the commercial vehicles company surpassed its previous high of Rs 887.80, touched on October 7, 2022. In comparison, the S&P BSE Sensex was up 1 per cent during the same period.

The company reported a 59 per cent year-on-year (YoY) jump in total sales at 2,169 units in March 2023. It had sold total 1,363 units in March 2022.

Besides, SML Isuzu’s cargo vehicle sales dropped by 44 per cent to 391 units in March 2023 as against 698 units sold in March 2022. However, the sales volume of passenger vehicles jumped 167 per cent to 1,778 units against 665 units sold last year.

The company is primarily engaged in the business of manufacturing and sale of commercial vehicles and their parts. The strong growth during the month was driven by improving freight demand, economic recovery and government’s thrust on infrastructure spending.

Meanwhile, to cover the increase in input prices due to new compliances - BS6 Integrated On-Board Diagnostic II (IOBD-II) and Electronic Stability Control (ESC) for buses, being implemented with effect from April 1, 2023 and general inflation, the company has decided to increase the prices of its vehicles (both Trucks & Buses) with effect from April 1, 2023. The company said it will increase prices for its truck models by up to 4 per cent and by up to 6 per cent for bus models.

The goods segment is expected to lead the recovery over the near term supported by construction & mining activities, government spending on infrastructure and deferred replacement demand. Further, scrappage policy and the upswing in the e-commerce sector are expected to add volumes. With opening of educational institutions and offices, the bus segment volumes are likely to revive sequentially, although it would take some time to reach at pre-covid levels, SML Isuzu said in its FY22 annual report.

However, rising fuel prices especially CNG and its consequential impact on the fleet operators, volatility in the commodity prices along with supply chain disruptions, hike in interest rates, chip shortages and geopolitical issues will remain a concern for the industry, it said.

Meanwhile, shares of Atul Auto soared 8.4 per cent to Rs 401 on Wednesday, surpassing its previous high of Rs 397.70, touched on February 17, 2023. In the past two trading days, the stock has rallied 28 per cent after the three-wheeler maker reported a sharp surge in total monthly sales.

The company’s total sales in March rose 115 per cent to 3,154 vehicles from 1,470 a year earlier. In the financial year 2022-23, the company’s total sales increased by 59 per cent YoY to 25,549 vehicles.

The company manufactures passenger cars and vans that run on various fuels, including compressed natural gas, liquefied petroleum gas and electricity. Atul Greentech Private Limited (AGPL), a subsidiary of Atul Auto, in January announced its foray into the electric space with the unveiling of two electric three wheelers, Atul Mobili & Atul Energie.

Atul Auto continues its efforts towards increasing penetration in EV and CNG segments; improving credit access via its captive finance arm; strengthening presence in key export markets; expanding its distribution reach; and debt reduction, owing to equity infusion and better cash flow generation, analysts at Emkay Global Financial Services had said in a Q3 result update.