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Systematix Research Report
Commercial vehicles are seeing robust retail sales momentum, especially in the medium and heavy commercial vehicle segment as the industry recovers from a deep cyclical downturn (~60% decline from FY19 peak).
Our detailed note in January 2022 highlighted that all demand indicators pointed towards the imminent recovery, however, Covid-19 third wave and fuel price uncertainty impacted the demand in early Q4 FY22.
We are now seeing a robust demand uptick as fuel price increase was much lower than expected and a further improvement in macro.
Vahan data (retail sales) suggest April 2022 M&HCV / volume is up 57% YoY and 10% month-on-month (March is seasonally the largest buying period).
Channel inventory remains low and consequently, discounts are at the lowest level in the last three years. Q4 data also suggest a decent pick up in South markets which have lagged the other parts of the country.
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