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Upbeat on urban FMCG play; like Bajaj Auto, Maruti: Emkay

Within the auto segment, two-wheelers saw some uptick in demand due to festival and new launches but dealers are not sure if this will sustain going forward, says Dhananjay Sinha of Emkay.

Speaking post their analyst survey with dealers from various industries like auto, home building materials (tiles etc), vehicle finance, FMCG etc., Dhananjay Sinha, Head of Institutional Research at Emkay says the demand overall was quite muted till the festive season but at the onset of the season some sporadic demand was visible especially in segments like two-wheelers and home appliances.

Within the auto segments, two-wheeler saw some uptick in demand due to festival and new launches but dealers are not sure if this will sustain going forward, says Sinha.

From the commercial vehicle (CV) space, sales were higher in the second hand category to the tune of 50-60% of total sales according to dealers, says Sinha adding that analysts are confident of double-digit growth for the CV segment.

Emkay is bullish on Bajaj Auto and Maruti Suzuki from the auto space – Bajaj on back of trying to gain market share in the 100 cc category and Maruti on back of uptick in demand post 7th pay commission. Tata Motors too has been their favourite since it was around Rs 300.

Sinha is also upbeat on the Asian Paints from the paint segment although dealers were concerned on volume growth for the sector but festive season has bought some cheer according to them.

From the FMCG space their strategy at Emkay is underweight rural, overweight urban plays. The house is upbeat on Britannia Industries , Godrej Consumer and GSK Consumers but not positive on Hindustan Unilever.

With a lack of pick up in rural sentiment and contraction in overall growth, he is not so upbeat on tractor makers but says according to dealers last few months saw some improvement lead by inventory push by companies.

For entire discussion, watch video

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