Sales of passenger cars and MHCVs turned around in Q2, even as 2W volumes remained healthy with an improving macro releasing the pent-up demand. Higher volumes and richer product mixes are likely to drive QoQ margin expansion for BJAUT, AL and TVS, while MSIL should also benefit from favourable cross-currency movements. Overall, AL, HMCL, TVS and MSIL should report the strongest PAT growth YoY, while BJAUT and MM would remain laggards.
Q2 picks: MSIL, HMCL.
Volume growth sustains with the onset of festive season: With better macro sentiments and arrival of the festive season, volume growth across most segments picked up further in Q2. Also, growth in 2Ws continued to outstrip that in 4Ws. In 2Ws, HMCL/TVSL reported a sharp 19% QoQ/36% YoY volume growth, while BJAUT's growth picked up to 10% (from the lows of past 6 quarters) led by higher exports. Among 4Ws, MSIL's volumes soared 17% YoY (domestic: +19%), while MM auto sales fell 1% YoY (tractors +3%). In CVs, growth recovered smartly in the MHCV segment (with AL gaining share).
Margin improvement expected across 2Ws: Higher volumes (driving operating leverage) and richer product mixes should aid margins QoQ for 2W players. BJAUT is expected to see the sharpest margin expansion QoQ of 110bps (-260bps YoY) owing to an enhanced product mix led by higher exports and 3W sales. Among others, TVSL and HMCL are likely to report an 80bps and 30bps margin expansion, owing to better operating leverage and benefits from a margin expansion program, respectively. HMCL's PAT should also get a boost (+47% YoY) from the conclusion of royalty amortisation in Q1.
Margin performance mixed for 4Ws: A smart recovery in MHCV volumes should lead to a sharp margin turnaround for AL (+220bps QoQ/+470bps YoY), driving a PAT gain of Rs 204mn for the quarter. A volume pick-up for TTMT (standalone) should help improve margins by 180bps and bring down PAT losses to Rs 7bn. However, on a consolidated basis, TTMT margins are likely to contract 170bps QoQ on lower JLR margins. MSIL will benefit (+60bps margin expansion) as yen depreciation and higher operating leverage from a volume pick-up offsets the impact of discount offerings. MM however is likely to report a 70bps margin decline (MM+MVML) owing to a lower share of tractors and continued pressure in the auto segment.
View: Overall, Ashok Leyland , Hero Motocorp , TVS Motor Company and Maruti Suzuki India (MSIL) are expected to report the strongest PAT growth in Q2, while Bajaj Auto and Mahindra and Mahindra would remain laggards (on a YoY basis). Even as 2Ws continue to outstrip 4Ws in terms of volume growth, we believe volumes for the sector would be further aided by festive season sales amidst improving consumer sentiments, a soft base and new launch sales.
For all recommendations, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Anda sedang membaca artikel tentang
Festive sales bring in recovery for automobiles: Religare
Dengan url
http://harmonisem.blogspot.com/2014/10/festive-sales-bring-in-recovery-for.html?m=0
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Festive sales bring in recovery for automobiles: Religare
namun jangan lupa untuk meletakkan link
Festive sales bring in recovery for automobiles: Religare
sebagai sumbernya
0 komentar:
Posting Komentar