AutoStocks MaySee Rerating as Monsoon Hopes Lift Prospects
nicely spread across months as well as regions, which is a very good sign. While the overall effect of the monsoon on cash flow will take effect in the second half, there is an expected latent demand and positive sentiment around monsoon does generate buying. We anticipate a 10% rise in tractor sales in the first quarter, based on the actual monsoon we can determine the full year forecast,” added Jejurikar.
Mirroring the enthusiasm in the tractor industry, even two-wheeler makers expect an upside. Market leader Hero MotoCorp expects the market to turn around in the second half of FY17.
YS Guleria, senior VP, sales and marketing at Honda Motorcycle & Scooter India a l s o c o n f i r med this. “We were expecting the twowheeler market to g row by 4-5% in FY17, thanks to the good news on monsoon, we would see an upside of 1-2%,” Guleria said.
The markets have got a whiff of the changing mood, resulting in the recalibration of share prices of automotive stocks. Subrata Ray, senior group vice president at ratings firm ICRA says: “The agency had forecasted for a 4-6% growth for the tractors and twowheeler segments.
However, in the event of healthy a monsoon, with good distribution across the country, there could be upward revision in estimates for both tractors and twowheelers.”
Maruti share price added 4.42%, Tata Motors gained 3.40%, M&M surges 7.40% on Wednesday