Auto stocks in reverse gear on weak January sales data, Tata Motors slips 2%

MUMBAI: Shares of four-wheeler makers were subdued after disappointing sales data for the month of January 2014. According to analysts, the stocks are likely to be underperformers in the medium term due to high interest rates. RBI governor Raghuram Rajan is expected to keep interest rates high in the face of high inflation figure.

Mahindra & Mahindra continued its weak performance as passenger vehicle segment once again witnessed a steep decline in volumes. Total volumes declined 6.2 per cent Y-o-Y to 62,794 units during the month. Tractor sales sustained strong growth traction, reporting an increase of 15.1 per cent Y-o-Y due to strong farm output following good monsoon.

Maruti Suzuki reported a 10.3 per cent Y-o-Y decline in total volumes to 102,416 units, in line with Angel Broking’s expectations, mainly due to a 47.7 per cent Y-o-Y decline in exports. Domestic volumes too posted a 6.3 per cent Y-o-Y decline, led by a 17 per cent Y-o-Y decline in the mini segment. The super compact segment, however, continued its strong run registering a growth of 12.7 per cent Y-o-Y, led by Dzire.

According to Angel Broking analysts, Tata Motors continued its poor run as domestic, commercial and passenger vehicle volumes contracted sharply following weak consumer demand, slowdown in industrial activity and increasing competition.

Total volumes declined by 34.3 per cent Y-o-Y to 40,481 units with the domestic CV and PV segments registering a sharp decline of 36.9 per cent and 27 per cent Y-o-Y, respectively. Within the CV space, medium and heavy (MHCV) and light commercial vehicle segments witnessed a decline of 4 per cent and 45.3 per cent Y-o-Y, respectively.

Tata Motors closed the day on the BSE at Rs 336.60, down 3.79%.

Maruti Suzuki ended the day Rs 1,620.70; down 0.90%.