Auto companies' second-quarter results are also expected to be weaker in terms of revenue

Monday, Ta. October 14, 2019, Monday

Most auto companies believe the current fiscal second quarter results are also weak in terms of revenue. Auto companies' earnings have been affected by slow demand and huge discounts.

Most brokerage houses are seeing a net profit of the top eight auto companies, on average, averaging 5.5 percent annually. The second quarter results season started last week.

For the past one year, auto market sales of auto companies have dropped drastically. The September quarter's results will be the sixth consecutive quarterly results for auto companies that are likely to see double-digit profits, said a brokerage house research head.

The results of the top eight auto companies that have been estimated include Bajaj Auto, Ashok Leyland, Tata Motors, TVS Motors, Maruti, Mahindra, Eicher and Hero MotoCorp. With the current festive season weakening and the challenges of converting to BS2 standard, the auto companies are pushing and they are expected to stay in the current fiscal year, he added.

Weak sales figures, huge discounts and high operating costs are pushing companies' margins.

For the three months ended September, sales of passenger vehicles were down by 8.5 percent. Which is the lowest figure in the last seven quarters. Similarly, sales of commercial vehicles, three-wheelers and two-wheelers have declined by 5 percent, 8 percent and 8 percent respectively.

The overall slowdown in the economy has also impacted the sale of commercial vehicles. It is being claimed that the slowdown in the economy has affected the movement of goods.