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AUTOMOTIVE INDUSTRY
Domestic commercial vehicles industry volumes

to remain muted in Q4

The volumes for the domestic com- The light commercial vehicles (LCV) tic CV industry’s ability to scale previous
mercial vehicle (CV) industry are expec- segment, which reported a high-volume peaks hinges on sustenance of the mac-
ted to remain muted through Q4 FY2024 expansion of 15% and 23% in FY2022 ro-economic environment, improvement
as the base effect catches up in addition and FY2023, respectively, is expected in infrastructure activity and increased
to a perceived pause in the infrastructural to witness a volume contraction of 1-4% demand for last mile transportation.
activities as the model code of conduct during FY2024. The decline in FY2025
kicks in ahead of the General Elections. is expected to be sharper at 5-8% due to Operating margins to improve in FY24
Ratings agency, ICRA estimates the do- a high base effect, cannibalisation from The OPM for ICRA’s sample set com-
mestic CV industry volumes to register the electric three-wheelers (e3Ws) and the panies is expected to improve by 150-200
2-5% YoY growth in volumes in FY2024. slowdown seen in the e-commerce sector, bps to 9-10% in FY2024, aided by opera-
Subsequently, the industry’s sharp upcycle which continues to have a bearing on the ting leverage benefi ts and benign commo-
is expected to plateau in FY2025, with a overall demand within this segment. dity prices. ICRA expects the OPM to
decline of 4-7% in volumes. contract marginally in FY2025 to 8.5-9.5%
The buses segment is expected to on the back of lower volumes. ICRA does
According to Ms. Kinjal Shah, Vice register a healthy 18-21% YoY volume not expect any large debt-funded capacity
President & Co-Group Head, ICRA Rat- growth in FY2024 as the mandatory scrap- expansion related capex from the larger
ings: “ICRA expects the long-term demand page of older Government vehicles drives CV OEMs in the next two years, although
for CVs to remain intact. The continued replacement demand over the near term. these OEMs are expected to incur mode-
focus on infrastructure capex (as reitera- The growth is expected to moderate to rate capex towards their product develop-
ted in the interim budget for FY2024-25), 2-5% in FY2025 due to a high base effect. ment initiatives (especially on the electric
emphasis on private participation in infra- However, the Government’s recent initi- and hydrogen fuel powered drivetrains).
structure, construction, defence and manu- atives at addressing the payment security With better profi tability and lower debt,
facturing activities would remain a long- mechanism for electric bus operators will the credit metrics are expected to margin-
term positive for the CV industry. The new help in accelerating the adoption of electric ally improve in FY2024 and remain steady
railway corridors will result in higher last buses in the near term. Overall, the domes- in FY2025.
mile connectivity, which would benefi t the
CV industry. However, in the near term, NEW APPOINTMENT
ICRA expects the volumes to plateau on Dr. Gyanendra Shukla to head Rallis
a high base, amid the transient moderation
in economic activity in some sectors with India
the onset of the General Elections.”
The Board of Directors sector, possesses more
Among the various sub-segments of Rallis India Ltd., a leading than 34 years of leadership
within the CV industry, the medium and agri-inputs company, has ap- experience across India,
heavy commercial vehicles (M&HCV) pointed Dr. Gyanendra Shukla Asia-Pacifi c, and Africa.
segment is projected to witness a slow- as Managing Director & CEO
down in volume growth in FY2024 to of the company for a period Over the course of his
3-6%, as Q4 FY2024 is expected to wit- of fi ve years with effect from career, he has held nu-
ness a muted rise due to the high base of April 1, 2024. He will take merous senior positions
the previous year. The volumes are further over from Mr. Sanjiv Lal on in Commercial, Sales,
expected to decline by 4-7% in FY2025 completion of his term on Corporate Affairs, Tech-
amid a likely moderation in the momen- March 31, 2024. nology Development, and
tum of the Government’s capex in the fi rst Regulatory Affairs. Notably, he served
few months of the fi scal with the onset of Dr. Shukla, an experienced agri pro- in various global leadership roles at
the General Elections. fessional in the crop protection and seed Monsanto for over two decades.

132 Chemical Weekly March 12, 2024

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