Helping You Build Wealth With Honest Research
Since 1996. Read On...

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Revealed
India's Third Giant Leap

This Could be One of the Biggest Opportunities for Investors




Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.

AD

Sale of Commercial Vehicles on a Roll!
Thu, 18 Feb Pre-Open

It is believed that the demand for commercial vehicles (CVs) is a crucial indicator of economic recovery and hence, quarterly results of India's largest CV manufacturers assume great significance not only from the company's but also the economy's point of view. Recently, Ashok Leyland posted a growth of 53.5% YoY in its turnover because of a spurt in volumes. However, is it a sign of economic revival?

A part of the rise can be attributed to the government's policy to phase out the sales of commercial vehicles compliant with BS III emission norms from the beginning of April 2017. Upgrading the BS norms leads to lower pollution. Automobile companies are directed to shift to BS IV norms from the above mentioned date. Reportedly, prices of commercial vehicles will shoot up by atleast Rs 1 lakh once the BS IV norms are applicable. To counter this price increase, transporters are stocking up inventories at reduced prices.

Further, increase in sales can also be attributed to the rising public expenditure in the infrastructure sector. Mr Gadkari, Minister for Road Transport and Highways, stated that the quantum of stranded projects in the road sector have reduced from Rs 3,800 billion to Rs 150 billion. Further, the pace of building highways has gone up from 2km a day to 18km a day. Additionally, road ministry has approved the construction and widening of 1.52 lakh km of roads. What will all this lead to? The spurt in road construction leads to increased requirement of raw materials such as cement, which in-turn pushes up the quantum of fleet required to transport the raw materials to the construction site.

Reportedly, the transporters have also flush with more money on account of savings from lower diesel prices. This money is also being utilized to buy new fleets.

However, sustained growth in commercial vehicles will be witnessed once the factory output increases. The more the flow of goods in the market, more will be the requirement for commercial vehicles to transport the same. Hence, growth in the IIP numbers will be the key thing to watch out for going forward to track a sustainable uptrend in commercial vehicles.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Sale of Commercial Vehicles on a Roll!". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited).

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.