Anand Rathi: India Auto and Auto parts Conference - Key takeaways

India Auto and Auto parts Conference
Key takeaways
 Conference. The Anand Rathi Institutional Equities ‘India Auto
and Auto-Parts Conference’, held in Mumbai on 5 Oct ’10,
featured nine listed companies and one unlisted auto-ancillary.
Companies participating represented a diverse spectrum – from
the larger and well-established leaders to emerging ones.
 Key takeaways. The industry outlook for both the auto and autoancillary
sector continues buoyant. Auto companies have seen a
healthy 25% volume growth in the past 15 months. The demand
outlook for the industry is sound, although the higher base implies
that the growth rate now would be lower. Short-term production
constraints in the auto sector are expected to ease in CY11. The
auto-ancillary segment would grow, piggybacking on the domestic
auto growth, but the overseas market would be tapped more
aggressively ahead for future growth.
 Interesting stock ideas. M&M (secular volume growth with
subsidiary unlocking potential), Escorts (turnaround strategy in
place and implemented successfully), Setco Auto (beneficiary of
the spurt in CV demand and replacement demand potential),
Autoline Industries (CV demand, key supplier to Tata Motors,
moving up the value chain through designing services and
potential of monetisation of its Chakan land), Amtek Auto
(benefits of re-organisation, better capacity utilisation, growth in
the non-auto segment).