Automobile dealers to clock their fastest revenue growth in three fiscals
Higher car sales and more lucrative ancillary revenue would help stabilise operating margin at 3-5 percent compared to 4 percent in fiscal 2022, according to the research.
Retail vehicle registrations, which fell in FY21 and largely recovered in FY22, continued to improve in the first five months of current fiscal with retail demand and alleviating semi-conductor shortages.
Economic resurgence, stronger replacement demand, and the government's infrastructure drive are expected to boost CV dealer volume by 20-22%.
Price rises of 4-5 percent due to increased input prices would boost CV sector income by 25-27 percent, it claimed.
Better revenue and profitability growth could enhance auto dealers' cash accrual in fiscal 2023, which will assist lower working capital expenditures.
Debt indicators for car dealerships will improve this fiscal year due to higher cash flows, decreased inventory costs, and strengthened balance sheets.