Crisil: The sector is adjusting after a period of growth driven by geopolitical tensions, including the Russia-Ukraine war, and a surge in demand from China in the aftermath of the pandemic.
To ride on the momentum, the market leader in truck and bus radial tires is embarking on an expansion. It has planned a capital expenditure of Rs 1,100 crore towards capacity expansion as well as maintenance of the existing infrastructure over the next two years.
While the margin profile may vary widely across players operating in different segments, CRISIL said the average operating margin may continue to moderate to 33-35% in the next fiscal driven mainly by the correction in charter rates.
Passenger Vehicle Sales: After a historic 27% growth in FY23 with 3.9 million units sold, passenger vehicle (PV) sales in India are expected to grow at a moderated pace of 6-8% in FY24, according to an Olx Crisil Mobility report. Over the long term (5-year period), a healthy growth rate of 5-7% CAGR is projected. India s PV sales continue to advance at a brisk pace. For the third straight year, most other markets, which have seen sales inch up year on year, are still struggling to reach the pre-pandemic levels.
Sales of construction equipment have risen by nearly a fifth since April and are likely to close the year at 125,000-130,000 units, breaching the previous peak of 107,779 units in FY23, said Dimitrov Krishnan, head of Volvo CE India. Prior to this, construction equipment makers had reported record sales of 98,000 units in the prepandemic year of FY19.