The Nifty Auto index (down 1% at 9,903) and the S&P BSE Auto index (down 1% at 22,168) hit their respective 52-week lows in intra-day trade on Tuesday. In past one month, the auto indices have underperformed the market by falling 10% as compared to a 5.5% decline in the benchmark indices.
Escorts, Force Motors, Maruti Suzuki India, Maharashtra Scooters, VST Tillers Tractors, Eicher Motors and Atul Auto from automobiles and Setco Automotive, Amara Raja Batteries, Exide Industries, Motherson Sumi Systems and Minda Industries from auto ancillaries sector have seen their market price declined by in the range of 10% to 28% during the month.
“The rising crude oil and commodity prices especially petrol and diesel and frequent policy changes are the key concerns for the growth of the auto industry,” according to CARE Ratings.
Also, with the Reserve Bank of India (RBI) increasing repo rate from 6.25% to 6.5% in August 2018, the interest cost is expected to put further pressure on auto demand, the rating agency said in a recent note.
In August 2018, auto industry sales (including PVs, CVs and two & three wheelers) registered a low single-digit growth of about 6% year on year in overall sales vis-à-vis a 13.6% growth registered a year ago.
Going forward in FY19, CARE Ratings expects the auto industry to witness healthy growth as the disruptions caused by various policy implementations (demonetization, ban on BS-III vehicles, GST, rate revisions) have almost moderated. Also, demand is expected to improve especially for tractors and commercial vehicles on back of various initiatives taken by the government in the Union Budget 2019 for the agriculture and infrastructure sectors.
|AUSTIN ENGG CO||60.00||75.70||-15.70||-20.74|
|RANE BRAKE LIN.||695.65||831.35||-135.70||-16.32|
|SAR AUTO PROD.||180.00||213.85||-33.85||-15.83|
|L G BALAKRISHNAN||446.95||526.05||-79.10||-15.04|
|VST TILL. TRACT.||1880.20||2194.30||-314.10||-14.31|
|JAY BHARAT MAR.||376.05||437.75||-61.70||-14.09|
|AMARA RAJA BATT.||752.60||864.45||-111.85||-12.94|
|STEEL STR. WHEEL||1048.00||1191.40||-143.40||-12.04|
|Z F STEERING||968.00||1090.70||-122.70||-11.25|
|JAMNA AUTO INDS.||74.50||83.70||-9.20||-10.99|
|M & M||874.10||968.80||-94.70||-9.77|