Stocks of top three two-wheeler companies Hero Honda Motor, Bajaj Auto and TVS Motor Company have lost ground on selling pressure from market players following reports that the motorcycles for March 2003 is expected to witness a 8-10% drop.
In the mid-morning trade, the scrip of Hero Honda (down 1.64% to Rs 221.25), Bajaj Auto (down 1.56% to Rs 493.35) and TVS Motors (down 3.29% to Rs 453) were trading in negative territory. In last 16 sessions after the Union Budget 2003-04, on 28 February 2003, till the current levels the scrip of Hero Honda, Bajaj Auto and TVS has lost 0.87%, 4.45% and 11.5% respectively.
Meanwhile, the BSE Sensex was trading 7.47 points lower at 3,132.89, but having recovered from its day's low of 3102.65.
Tuesday's fall in the scrip of two-wheeler companies was on reports that the motorcycle market, which has grown rapidly in the recent past, is expected to hit a roadblock in March 2003 as the top volume players gear up for anything between 8-10% drop in sales and around 75% capacity utilisation. The fall in sales is being attributed to the combination of factors like the national calamity cess, increase in petrol prices and the continuing impact of poor monsoons last year.
Analysts said the news has been already known in the market. And to an extent the news is already been factored in the share price of the two-wheeler companies.
However analysts feel due to the ongoing US-Iraq war, the negative news flow has impacted the sentiments of the players on expectation that the sales will further deteriorate in the months to come with the US-Iraq war being prolonged, thus disrupting the Indian as well as global economy.
Meanwhile, analysts are bullish on the overall automobile sector, especially motorcycle segment. But feel that with tough competition following sustained launches and competitive pricing, volume growth for individual company will be difficult to grow.
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