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Auto stocks skid on disappointing December sales; TVS Motor tumbles 5%

The BSE Auto index closed 662 points lower at 20,103, with Eicher Motors, TVS Motor Company, Mahindra & Mahindra and Tata Motors shares falling between 3-8 per cent.

twitter-logo BusinessToday.In   New Delhi     Last Updated: January 2, 2019  | 16:42 IST
Auto stocks skid on disappointing December sales; TVS Motor tumbles 5%

Shares of automobile companies were reeling under selling pressure in Wednesday's trade, with Eicher Motors, TVS Motor Company, Mahindra & Mahindra and Tata Motors shares falling between 3-8 per cent.

The BSE Auto index closed 662 points, or 3 per cent, lower at 20,103 as investor weighed weak December sales numbers. The industry witnessed liquidity crisis due to muted commercial vehicle sales in wake of higher interest rates and rising fuel costs.

Eicher Motors emerged as top laggard across the auto space, with shares falling as much as 9 per cent in early deals after its two-wheeler division Royal Enfield reported weak sales in December. Royal Enfield reported a 13 per cent decline in total sales to 58,278 units in December compared to 66,968 units in December last year. Domestic sales stood at 56,026 units last month as compared with 65,367 units in December 2017, a dip of 14 per cent. The large cap stock closed 8.71 per cent lower at Rs 21,164, compared to its previous close of Rs 23,184 on the BSE.

Alos Read: Eicher Motors stock falls over 5% on 13% decline in Royal Enfield December sales

Shares of TVS Motor Company fell 5.34 per cent to Rs 535, even after the company reported 6 per cent growth in total sales at 271,395 units in the month of December 2018.The two-wheeler major sold 256,870 units in December 2017, TVS Motor said in a filing to the BSE.

Index heavyweight Mahindra & Mahindra (M&M) closed 4 per cent lower at Rs 741.50 after auto major posted 6 per cent fall in tractors sales at 17,404 units in December 2018, due to tight liquidity and low buying sentiment. The company had sold 18,488 units sold in the same month last year.

Tata Motors shares fall 2.91 per cent to settle at Rs 168.55 after the company posted an eight per cent decline in domestic sales at 50,440 units in December versus 54,627 units sold in the same month last year.

Among others, Maruti Suzuki India, the country's largest car maker, also ended in negative terrain after the auto major reported a 1.3 per cent decline in total sales at 128,338 units in December, compared to 130,066 units sold in the same month last year. Domestic sales were up 1.8 per cent at 121,479 units as against 119,286 units in the year-ago month, Maruti Suzuki India said in a filing to the BSE. Weighed down by the development, shares of the company closed trade at Rs 7272.45, down 2.74 per cent, on the BSE.

Meanwhile, Indian benchmark indices, Sensex and Nifty, closed lower on the second straight session of this year hit by losses in auto, metals and banking stocks. Investors also indulged in profit booking and turned cautious before corporate results begin to roll in next week while local indexes also tracked a decline in broader Asia.

Edited by Chitranjan Kumar

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