MSIL August-17 indicates faster recovery from GST blues
“Maruti Suzuki’s August-17 domestic PV volumes grew by 26.2% to 1.51 lakh units while total volumes including exports and LCVs, grew by 23.8% to 1.64 lakh units vs. our estimates of total volumes of 1.5lakh units. Growth in the volumes of mini and midsize vehicle segments was muted while compact segment volumes saw a jump of 62.4%, fastest in several months. The Utility vehicle volumes grew by 27.6%, this was slower growth compared to the growth in the previous month. The numbers have beaten our estimates and indicate that the industry is witnessing faster recover from the GST blues.
This is also fastest growth that company has reported after January-17. We also note that immediately after demonetization, Maruti’s volumes recovered rapidly in January-17 and the same sort of recovery can be observed in the August-17 volumes. This is a clear indication of faster restocking by the dealers following GST and a strong demand for automobiles in the country. We maintain accumulate rating on the stock.”