HSBC has flagged potential structural headwinds for medium and heavy commercial vehicle (MHCV) volumes, driven by infrastructure and policy developments, and has reiterated its ‘Hold’ ratings on Ashok Leyland (TP ₹250) and Tata Motors (TP ₹770).
The brokerage noted that the Western Dedicated Freight Corridor (WDFC) — a major logistics infrastructure project — could shave off 3–5% from MHCV volume growth within 2–3 years of its completion.
This, coupled with other ongoing changes such as the widening of highways, increased live tracking of freight, and tight credit policies for fleet operators, may result in range-bound volume growth for MHCVs.
While the CV cycle has historically followed macroeconomic trends, HSBC sees these structural shifts as medium-term dampeners that limit the potential for a sharp volume uptick.
Disclaimer: The views and target prices mentioned are as stated by HSBC and do not represent the opinions or recommendations of this publication. Investors are advised to consult their financial advisors before making any investment decisions.
