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India Equity Research Reports, IPO and Stock News
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Moderating growth
In Jan-11, India’s car sales grew 26% YoY, 2Ws grew 18% YoY while CVs
grew 11% YoY. Growth rates have started to moderate as the high base
of early-2010 is kicking in. We expect growth of 20%, 12% and 0% for
cars, 2Ws and M&HCVs in FY12. In cars, Maruti’s share slipped 410bps
MoM to 49% with Tata Motors and Ford being the gainers. In CVs, Tata
Motors lost share in trucks to ALL and in LCVs to M&M. In 2Ws, Bajaj
regained some share from Hero Honda in bikes. We maintain a cautious
stance on the sector due to slowing growth and rising competition and
recommend a selective investment approach. Our top pick is M&M.
Cars & UVs: Strong growth continues; Maruti’s share dips 4.1ppts
India’s car sales rose 26% YoY in Jan-11. YTD growth now stands at 33%.
Maruti lost 4.1ppts MoM market share in Jan-11; combined market share of the 4
new small car entrants was up 2ppts. Tata also gained market share in Jan-11.
UV sales grew 19% YoY in Jan-11; M&M lost some market share
CVs: Growth moderating; Tata loses share in trucks and LCVs
Truck sales rose a modest 12% YoY in Jan-11; YTD growth now stands at 43%.
Truck industry growth has been slowing down in recent months. We expect a
slowdown in growth to 0% in FY12 post two years of 30%+ growth.
Goods LCV growth also moderated to 15% YoY in Jan-11; YTD growth is 27%.
Tata has lost market share in trucks (to ALL) as well as in LCVs (to M&M) in Jan-11.
2Ws/3Ws: Bajaj Auto gains market share
2W sales growth slowed down to 18% YoY in Jan-11; YTD growth now at 27%;
scooters continue to grow much faster than motorcycles.
Bajaj regained some market share in motorcycles in Jan-11 from Hero Honda
Passenger 3W industry growth is moderating while Bajaj has gained some share.
Be selective in 2011
Post 2 years of strong performance, we enter 2011 on a cautious note for India
Autos given slowing volume growth, rising interest rates and commodity prices, and
higher competition in many segments.
We recommend a selective approach while investing in the sector. Our top picks are
M&M (BUY, TP Rs875), Tata Motors (BUY, TP Rs1480) and Ashok Leyland (BUY, TP
Rs80).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Moderating growth
In Jan-11, India’s car sales grew 26% YoY, 2Ws grew 18% YoY while CVs
grew 11% YoY. Growth rates have started to moderate as the high base
of early-2010 is kicking in. We expect growth of 20%, 12% and 0% for
cars, 2Ws and M&HCVs in FY12. In cars, Maruti’s share slipped 410bps
MoM to 49% with Tata Motors and Ford being the gainers. In CVs, Tata
Motors lost share in trucks to ALL and in LCVs to M&M. In 2Ws, Bajaj
regained some share from Hero Honda in bikes. We maintain a cautious
stance on the sector due to slowing growth and rising competition and
recommend a selective investment approach. Our top pick is M&M.
Cars & UVs: Strong growth continues; Maruti’s share dips 4.1ppts
India’s car sales rose 26% YoY in Jan-11. YTD growth now stands at 33%.
Maruti lost 4.1ppts MoM market share in Jan-11; combined market share of the 4
new small car entrants was up 2ppts. Tata also gained market share in Jan-11.
UV sales grew 19% YoY in Jan-11; M&M lost some market share
CVs: Growth moderating; Tata loses share in trucks and LCVs
Truck sales rose a modest 12% YoY in Jan-11; YTD growth now stands at 43%.
Truck industry growth has been slowing down in recent months. We expect a
slowdown in growth to 0% in FY12 post two years of 30%+ growth.
Goods LCV growth also moderated to 15% YoY in Jan-11; YTD growth is 27%.
Tata has lost market share in trucks (to ALL) as well as in LCVs (to M&M) in Jan-11.
2Ws/3Ws: Bajaj Auto gains market share
2W sales growth slowed down to 18% YoY in Jan-11; YTD growth now at 27%;
scooters continue to grow much faster than motorcycles.
Bajaj regained some market share in motorcycles in Jan-11 from Hero Honda
Passenger 3W industry growth is moderating while Bajaj has gained some share.
Be selective in 2011
Post 2 years of strong performance, we enter 2011 on a cautious note for India
Autos given slowing volume growth, rising interest rates and commodity prices, and
higher competition in many segments.
We recommend a selective approach while investing in the sector. Our top picks are
M&M (BUY, TP Rs875), Tata Motors (BUY, TP Rs1480) and Ashok Leyland (BUY, TP
Rs80).
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