Indian automakers reported a considerable increase in passenger vehicle sales as mid-segment cars and SUVs benefited from the festive demand, along with also boosting the entry-level category. Additionally, sales of electric two-wheelers hit an all-time high in October. As per data from the government website Vahan, which tracks vehicle registrations, the number stood at 75,294 units.
After the October sales numbers, brokerage firm Morgan Stanley said that 2023 would be the year India will see a massive scale-up in the EV sector as more companies start entering the market. The brokerage firm further noted that startups are expected to lead the race in 2023, and the market share of legacy original equipment manufacturers (OEMs) will start getting on track in 2024.
Morgan Stanley expects two-wheeler sales to grow eight percent until 2031, while the EV sector is expected to constitute 70 percent of this growth.
"As the government is focusing on decarbonisation, electric vehicle offerings are increasing, and consumer acceptance of EVs is rising," said the brokerage firm.
Interestingly the brokerage firm has also upgraded the rating on Bajaj Auto to "overweight" from "equal-weight" despite a 10 per cent year-on-year drop in October auto sales. The target price has been raised to Rs 4309, implying a 15 percent upside from the previous close for the stock on the BSE.
The brokerage firm is of the view that export-slowdown risks have largely priced in, and the strong portfolio of brands - Pulsar, KTM and Triumph (2023 launch) - should help the business gain share in the premium motorcycle space.
In the two-wheeler segment, the company saw a decline of 13 percent at 3.41 lakh units as compared to selling 3.91 lakh units in the corresponding period a year ago. While three-wheeler sales went up by 10.4 percent.
The automaker saw a major hit in the exports markets where sales went down by 31 percent
Check all ratings and target prices by Morgan Stanley on Auto companies-
| Company | Rating | Current Target Price | Upside/Downside from CMP |
| Bajaj Auto | Overweight (Upgrade) | Rs 4309 | +15% |
| TVS Motors | Evenweight (Upgrade) | Rs 1106 | -0.7% |
| Eicher Motors | Evenweight (Downgrade) | Rs 4065 | +9% |
| Hero MotoCorp | Underweight (Constant) | Rs 2281 | -13% |
At 12:47 shares of Bajaj Auto were trading at Rs 3,775, up by 1.11 percent, while Eicher Motors fell 1.75 percent, TVS Motors gained 0.9 percent and Hero MotoCorp fell 0.11 percent from their previous close on the BSE.
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