Hero MotoCorp, Ashok Leyland, Bajaj Auto, TVS Motor Company, Eicher Motors, Balkrishna Industries and Cummins India from the auto index were up in the range of 1 per cent to 4 per cent on the BSE. At 12:14 pm, the S&P BSE Auto index was up 0.5 per cent, as compared to 0.69 per cent decline in the S&P BSE Sensex.
“The months of August and September 2020 have brought plenty of signs that the volumes may be well along on its recovery from sharp cyclical downturn. We estimate that the recent recovery volumes will manifest into a powerful cyclical rally across segments,” analysts at Emkay Global Financial Services said in sector update.
The expectations of festive season demand are positive. Given that festive season is commencing post a lengthy inauspicious period, demand pick-up is expected across segments. Growth is expected to be in double-digits for tractors, while flat- to single-digits in passenger vehicles (PVs) and two-wheelers (2Ws), it said.
Shares of Hero MotoCorp hit a fresh 52-week high of Rs 3,380, up 2 per cent on the BSE in intra-day trade. In the past one week, the stock has gained 11 per cent after the company reported strong 17 per cent volume growth in the month of September. In comparison, the S&P BSE Sensex was up 3.7 per cent during the period.
With the peak festival season coming up in the months of October and November, Hero MotoCorp remains cautiously confident of achieving yet another benchmark in post-Covid retail sales with the help of positive consumer sentiments and continued government policy support.
To partially offset the rising input costs and commodity prices, the company has made an upward revision in the ex-showroom prices of its motorcycles and scooters by up to 2 per cent, with the exact quantum varying on the basis of the model and specific market. The revised prices are effective from October 1, 2020.
Hero MotoCorp is market leader in 75-125CC motorcycles and the company’s products having good traction in rural pockets. Going forward, analysts at Angel Broking expect healthy growth on the back of a strong brand, wide distribution network and new product launches.