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Hero Honda: Run rate maintained
HH’s volumes, at 472,000, rose 17% Y-o-Y and 1% M-o-M respectively.
Sequentially, sales are positive considering historical trend. The company will drop
the Honda brand from its flagship models i.e., Passion and Splendor by June as
part of a rebranding exercise and to carve out an independent identity of the Hero
Group at the earliest.
Mahindra & Mahindra: Tractors drive growth
UV sales and pick up sales remained steady (up 11% Y-o-Y and 13% Y-o-Y),
whereas, even considering seasonality, Mahindra & Mahindra’s (M&M) sales were
in line M-o-M. Tractors continued to drive overall growth (up 37% Y-o-Y, down
7% M-o-M) indicating strong underlying demand and partially negating the
current macro headwinds which the industry is facing.
Maruti Suzuki: Continues to operate at 100%
Sales were strong across all segments; hatchback (A2) and sedan (A3) sales
continued to register stronger volumes, up 19% Y-o-Y and 27% Y-o-Y,
respectively. Maruti Suzuki (MSIL) will further increase production capacity to 1.4
mn units w.e.f. April 2011 aided by another 250,000 units in H2FY12. During the
month, the company launched two models—diesel variant of SX4 and a new
premium model Kizashi in the A4 segment.
Tata Motors: CV outperforms PV growth sequentially
MHCV sales (up 1% Y-o-Y, 7% M-o-M) were marginally disappointing on a yearly
basis, but positive on sequential basis. LCV sales (up 8% Y-o-Y, down 1% M-o-M)
were also below expectations, indicating that Tata Motors (TTMT) could have
faced capacity constraints rather than demand slump. On the passenger car front,
Indica (compact segment) sales continued to skid (down 13% Y-o-Y) while the
Indigo range (sedan segment) reported yearly sales growth of 22% Y-o-Y. Nano
sales have revived on the back of various promotional schemes.
Outlook: Volume growth to moderate
Going forward, we expect volume growth to moderate. Underlying growth drivers
remain upbeat. However, current headwinds with respect to low IIP growth,
looming liquidity crisis, rising interest rates, rising inflation and fuel costs could
dampen sentiments, proving negative for the sector. Tractors demand is least
affected by rising interest rates. Also, a good rabi crop augurs well for tractor
demand. We have ‘BUY’ recommendation on M&M and TTMT.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hero Honda: Run rate maintained
HH’s volumes, at 472,000, rose 17% Y-o-Y and 1% M-o-M respectively.
Sequentially, sales are positive considering historical trend. The company will drop
the Honda brand from its flagship models i.e., Passion and Splendor by June as
part of a rebranding exercise and to carve out an independent identity of the Hero
Group at the earliest.
Mahindra & Mahindra: Tractors drive growth
UV sales and pick up sales remained steady (up 11% Y-o-Y and 13% Y-o-Y),
whereas, even considering seasonality, Mahindra & Mahindra’s (M&M) sales were
in line M-o-M. Tractors continued to drive overall growth (up 37% Y-o-Y, down
7% M-o-M) indicating strong underlying demand and partially negating the
current macro headwinds which the industry is facing.
Maruti Suzuki: Continues to operate at 100%
Sales were strong across all segments; hatchback (A2) and sedan (A3) sales
continued to register stronger volumes, up 19% Y-o-Y and 27% Y-o-Y,
respectively. Maruti Suzuki (MSIL) will further increase production capacity to 1.4
mn units w.e.f. April 2011 aided by another 250,000 units in H2FY12. During the
month, the company launched two models—diesel variant of SX4 and a new
premium model Kizashi in the A4 segment.
Tata Motors: CV outperforms PV growth sequentially
MHCV sales (up 1% Y-o-Y, 7% M-o-M) were marginally disappointing on a yearly
basis, but positive on sequential basis. LCV sales (up 8% Y-o-Y, down 1% M-o-M)
were also below expectations, indicating that Tata Motors (TTMT) could have
faced capacity constraints rather than demand slump. On the passenger car front,
Indica (compact segment) sales continued to skid (down 13% Y-o-Y) while the
Indigo range (sedan segment) reported yearly sales growth of 22% Y-o-Y. Nano
sales have revived on the back of various promotional schemes.
Outlook: Volume growth to moderate
Going forward, we expect volume growth to moderate. Underlying growth drivers
remain upbeat. However, current headwinds with respect to low IIP growth,
looming liquidity crisis, rising interest rates, rising inflation and fuel costs could
dampen sentiments, proving negative for the sector. Tractors demand is least
affected by rising interest rates. Also, a good rabi crop augurs well for tractor
demand. We have ‘BUY’ recommendation on M&M and TTMT.
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