Street unhappy with most auto firms like Maruti Suzuki, Mahindra, Bajaj Auto, Tata Motors but happy with Ashok Leyland

Even as auto manufacturers posted May sales numbers, the auto pack witnessed a lot of action on Wednesday. Street reacted negatively to stocks of all big auto players, especially Maruti Suzuki, Tata Motors, Mahindra & Mahindra (M&M), and Bajaj Auto.

Of all auto players, the Street was happy with Ashok Leyland's performance which showed a sharp increase in total sales.

May #AutoSales | 2-wheeler companies except Eicher’s Royal Enfield reported lower sales for May 2022 against May 2019 while sales of all the 4-wheelers have come in higher NOTE: May 2022 sales are compared against May 2019 as May 2020, 2021 sales were impacted by #COVID lockdown

The Street cheered Maruti Suzuki initially but shares of the car market leader went down 0.85 percent after the firm said the shortage of electronic components had a minor impact on production.

Maruti Suzuki's May total sales were at 1.61 lakh units versus Nomura’s estimate of 1.59 lakh units and versus 1.34 lakh units in May 2019.

Shares of Tata Motors, too, bore the impact of investor sentiment and dipped a little over half a percent, quoting at Rs 441.25 on the BSE.

This is despite the fact that the company saw sales of all its segments surpassing May 2021 figures.

Shares of Mahindra & Mahindra Limited touched a new 52-week high of Rs 1,048.74, however, thereafter hit low levels.

At 11:48 am, the stock was down 1.39 percent, trading at Rs 1,023.50 on the BSE.

M&M May total auto sales were at 53,726 units versus Nomura’s estimate of 46,400 units and versus 45,400 units in May 2019.

Hero MotoCorp was down 1.39 percent at Rs 2,745.25 on the BSE. The stock fell after 4 consecutive days of gain and underperformed the sector by 0.27 percent. TVS Motor continued its losing spree of the last 2 days and was down 0.45 percent, trading at Rs 733.30 on the BSE. Eicher Motors declined 0.68 percent or by Rs 23, quoting at Rs 2,762 apiece on the BSE. The Street didn't care much about the increase in the company's total commercial vehicle sales.

Of all the companies in the space, Bajaj Auto failed to impress the Street the most as exports declined 22 percent on a year-on-year (YoY) basis. At 12.25 pm, the stock was quoting at Rs 3,753.90 apiece, down 2.82 percent or Rs 109.50 on the BSE. The scrip has fallen after two consecutive sessions of gains and has underperformed the sector by 1.39 percent.

The company’s total sales in May came in at 2,75,000 units versus 271,000 in the same period of last year, showing a marginal rise.

For months now, auto manufacturers have been grappling with semiconductor shortages, which has impacted both production and sales. In an interview with CNBC-TV18, Rakesh Sharma, Executive Director at Bajaj Auto, highlighted that May saw a shortfall of 40 percent on account of chip supply woes and the company is taking active measures to combat the short supply.

“The overarching issue which we are facing since March onwards is severe impairment in semiconductor supply. We faced a shortfall of about 25 percent to our plan in April and almost 40 percent to our plan in May,” he said. “This is now at the end of it because after March, there has been a very vigorous effort to broad-base the vendor, portfolio of these components. We will start to see big scale-up unfolding from July onwards.”

The Street reacted unfavourably even though Escorts witnessed a rise in total as well domestic sales of tractors. At 01:13 pm, the shares of Escorts fell 2.23 percent and were quoting at Rs 1,594.30 per piece on the BSE. The company, however, remains positive as it believes rural sentiment is improving, which in turn will increase tractor sales as well.

Meanwhile, Ashok Leyland traded in the green. At 1.03 pm, the stock was up 1.05 percent, at Rs 139 per share on the BSE.

The Street celebrated the huge increase in total sales of the company, including light commercial vehicle (LCV) sales as well as medium and heavy commercial vehicle (M&HCV) sales.