Angel Broking believes that the auto industry continued to build on the growth trend witnessed over the last two quarters. ''The passenger segment viz (passenger vehicles (PV) and two-wheelers (2W) retained their double digit growth momentum, reporting 12% and 9% yoy growth respectively during November 2014. Also, the Commercial vehicle (CV) volumes recovered, reporting the first month of positive growth in the fiscal which is the key highlight of the month. Continued double digit growth in the medium and heavy commercial vehicle (MHCV) segment due to improvement in fleet utilization and moderation in decline in the light commercial vehicle (LCV) segment led to the improvement in CV sales,'' it said.
''Better economic growth (two consecutive quarters of >5% GDP growth) and positive consumer sentiment has resulted in marked improvement in automotive sales over the last two quarters. The passenger segment (passenger cars and 2W) has surged in double digits in YTD FY2015 (April 2014 to November 2014) and we expect continued improvement going forward. The CV space also reported its first month of volume growth in November 2014 after a gap of two years, led by sharp improvement in MHCV volumes. With strong momentum in MHCVs and recovery in LCV volumes, we expect the CV recovery to accelerate further in FY2016,'' it said.
''Amongst our universe, we prefer Maruti Suzuki due to recovery in the PV space and on likely gains in market share given its strong product pipeline. We like Tata Motors for the strong performance of JLR and turnaround in the domestic business. In the mid cap space we continue to prefer Ashok Leyland as it is a pure MHCV play and would be huge beneficiary of turaround in the MHCV volumes. We also like Eicher Motors due to huge demand potential and capacity expansion at Royal Enfield and strong growth in VECV due to turnaround of the CV industry,'' it opined.
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