Downward drift

Nifty50: 17,844 ▼ 99 (-0.5%)
Sensex: 60,691 ▼ 311 (-0.5%)

Hi dear reader !

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But no more waiting for verified market news. We have got it covered for you.

• After a gap-up opening, the markets moved downwards.
• Of the Nifty50 universe, 30 stocks declined.
• Bank stocks dragged down benchmark indices.

All the Nifty sectoral indices ended in the red, except IT (+0.5%) and Auto (+0.2%). Oil & Gas (-1.1%) and PSU Bank (-1.1%) were the top losers.

What’s trending

⭐ Motherson share surges on new acquisition 

Subsidiary of Samvardhana Motherson (+2.7%) has entered into an agreement to acquire 100% stake in SAS Autosystemtechnik at an enterprise value of €540 million. The acquisition will help Motherson’s enhance its global automotive supply chain. 

⭐Tata Motors and Uber signs 25k EV deal 

Tata Motors (+0.5%) has signed an agreement with Uber to supply 25,000 electric vehicles (EVs). The company will deliver XPRES-T EVs to ride-sharing  app Uber in a phased manner starting this month. Uber will utilise the electric fleet for their premium category. This will be operational across seven metro cities in India.

⭐ Bharat Dynamics shines on order win 

Shares of defence company Bharat Dynamics (+4.6%) rose after the company secured an export order worth USD 255 million. In the recently concluded Aero India 2023 event, the company showcased its products, including missiles and radars and also entered into ten Memorandums of Understanding (MoU) with several foreign and Indian companies.  

⭐Crisil announces dividend   

Rating agency Crisil (+2.6%) reported 16.5% YoY rise in revenue from operation to ₹822 crore for the quarter ended 31 December 2022. Research and analytics business reported 18.6% YoY growth in revenue to ₹645 crore and made a major contribution to overall earnings. Meanwhile, its net profit rose by 17.5% YoY to ₹158 crore. The company also announced a final dividend of ₹23 per share. 

⭐Supreme Industries’ new plant   

Plastic product manufacturer Supreme Industries (-1.6%) has commenced commercial operation of its 28th unit set up at Cuttack. The new units will manufacture plastic piping products with initial capacity of 16,800 MT per annum and a capex of ₹90 crore. The capacity will be further expanded by 43,200 MT per annum by the first quarter of FY24.

In Focus

Why are truck sales accelerating?

In the December quarter, more than 77,000 trucks were sold in India – a growth of 28% year-on-year. This was the eighth consecutive quarter of double digit growth for commercial vehicle (CV) manufacturers. 

So, let’s see what are the reasons behind this consistent rise in sales and whether this trend will continue: 

1. Economic revival 

After the pandemic, economic activities in India are in top gear. There is healthy traction in industries like steel, cement, mining and automobiles, according to experts. How does this translate into a rise in demand for trucks? Trucks are needed for transportation of raw materials and goods these companies produce. 

2. Infra push

The government’s mega infrastructure push could further drive truck sales. In the 2023 Union Budget, the central government substantially increased infrastructure allocation to ₹10 lakh crore, an increase of 33%. It also set aside ₹2.4 lakh crore for rail infra. Besides this, the affordable housing segment also received ₹79,000 crore, up 66%. This could lead to sustained economic growth and in turn more demand for trucks. 

3. Digital play   

Also, as more and more Indians become digitally savvy, the e-commerce market is expected to increase by 18% annually through 2025. From fashion and food to grocery and electronic appliances – online shopping is witnessing a surge. This means there will be a need for more smaller trucks to transport goods to delivery centres. 

4. Freight rates

Experts highlight that in the wake of strong economic activity, freight rates in India are holding up. Basically, these are the charges for transporting goods. This has led to improvement in fleet operators’ viability and could give them impetus to increase the fleet. 

All these factors could propel commercial vehicle (CV) makers into the super fast lane. Meanwhile, shares of CV manufacturers like Ashok Leyand and Tata Motors are up in the range of 3% to 14% this year. 

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