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September auto sales indicate some stability in passenger car and two-wheeler segments but suggest further deterioration in commercial vehicle segment, especially in MCHV
Auto sales during September turned out to be better for passenger vehicles and two-wheelers, while the commercial vehicle (CV) segment deteriorated further.
"As per our calculations, car industry volumes were likely flattish in September (up 1%) as compared to our expectations of 5% decline. A part of this could be led by inventory build up ahead of the festive season, in our view," said Nomura Financial Advisory and Securities (India) Pvt Ltd, in a research note.
During the month, Maruti Suzuki India (MSI) Ltd, the country's largest carmaker, reported 11.7% increase in total sales at 1.05 lakh units as against 93,988 units same month last year. For other unlisted companies, Korean automaker Hyundai Motor Co unit Hyundai Motor India Ltd’s volumes were flat which is somewhat disappointing while Honda Cars India Ltd volumes increased by 90%, led by Amaze at 6,700 units. During the month Honda Cars sold 10,354 units compared with 5,508 units, same month last year.
Tata Motors, India's largest vehicle maker, reported over 33% fall in its September sales to 50,427 units. While its passenger vehicle sales fell 41% to 12,879 units, CV sales come down 32% to 33,119 units from a year ago period.
Mahindra & Mahindra (M&M), the country's largest utility vehicles (UVs) maker reported a 10.45% decline in its total sales at 43,289 units in September 2013. The company had sold 48,342 units in the same month last year. However, M&M's tractors sales jumped 33% to 26,637 units in September.
In two-wheeler segment, Honda Motorcycle & Scooter India Pvt Ltd (HMCL) reported 35% higher sales due to 44% jump in bike and 28% growth in scooter segment. Hero MotoCorp (HMCL) reported 15.8% rise in total sales at 4.69 lakh units during the month compared with 4.05 lakh units in September 2012. Bajaj Auto reported 2.71% rise in motorcycle sales at 3.24 lakh units in September 2013 compared with 3.15 lakh units in the corresponding month last year.
"Our calculations suggest that domestic 2-wheeler industry volumes were up 17% in September, largely in line with expectations. Note that industry growth has come off a low base (industry volumes down 13% in Sep-12) due to inventory corrections at HMCL last year," Nomura said.
During the month overall volumes for medium and heavy commercial vehicle (M&HCV) weakened further and declined by 39%. Ashok Leyland reported a 32% decline in CV sales to 7232 units compared with 10,620 units a year ago period.
Nomura added, "We see downside risks to our estimates for CVs which is negative for Tata Motors and Ashok Leyland. However, we reiterate our BUY rating on Tata Motors as growth momentum in JLR continues to remain strong. If the current trend continues, there could be downside risks to our volume estimates for HMCL as well while there could be some upside to M&M’s tractor numbers."
Thursday’s freak trade, the third such incident in 2013, in Nifty futures happened with multiple contracts changing hands with a peak level of 5,996
In yet another freak trade, the National Stock Exchange (NSE)’s October futures surged 2.8% to near 6,000 levels before paring gains. At the 5,996 level, the near month contract (October futures) was priced higher than even the November future prices, which made a high of 5,984.
Multiple contracts in the Nifty October futures changed hands on the NSE, with a peak level of 5,996, a gain on the day of as much as 2.87%. They quickly dropped back for a gain of about 1.5%.
The reason behind this freak trade is yet to be discovered by the exchanges, it can be system failure or any unusual trading activity which creates this price movement.
This is the third such incident of freak trade on NSE in 2013. Earlier in February, share prices of Tata Motors and Ultra Tech fell by 10% in a jiffy, where trade from brokerage Religare Securities had caused the crash.
Earlier on 5 October 2012, the Nifty crashed by over 900 points when a dealer for stockbroker Emkay Global punched a wrong order. While NSE quickly blamed Emkay for the crash, but has not bothered to explain why its market-wide circuit filters failed to work. And now, NSE is seeking approval from the market regulator for its proposal under which brokers will have to collect margin money upfront from investors for trading in shares or the cash segment, similar to futures and options (F&O) trading.
At present, Exchanges collects upfront margins from brokers, but brokers do not ask clients for money in advance in the cash segment. In short, brokers are funding the clients, who settle the trades on next day using the ‘T+1’ settlement. The NSE move follows a show cause notice issued by SEBI, after the 5 October 2012 flash crash.
NSE blamed 'abnormal' orders, worth $126 million, placed by the stockbroker in multiple trades of various stocks at low prices, for the crash. NSE claimed there were no technical glitches in its system and the crash was due to 'erroneous' trade orders worth over Rs650 crore by Emkay, which was disabled by the bourse for trading. Both, Emkay and Religare have challenged the decision of the exchange in the Securities and Appellate Tribunal.
As Moneylife has already said, the NSE as well as the BSE seems to have ignored every check prescribed by market regulator Securities and Exchange Board of India (SEBI). Trading was not halted in both bourses and across market segments; but the regulators’ only reaction was to launch an investigation.
The NSE has always successfully evaded a close scrutiny of all technology issues for over a decade. In its initial years, especially under the leadership of the late Dr RH Patil, the NSE was seen as an extension of the regulator and the government system. Not any more. Today, the NSE is driven by profits, pay and perquisites of senior executives, which are tied to a desperate need to maintain market share.