Auto numbers: BAL, ALL – March 2011 :: Angel Broking,

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Auto numbers: BAL, ALL – March 2011
Bajaj Auto (BAL) reported marginally lower-than-expected overall sales growth of 12.2%
yoy (down 5.9% mom) to 307,738 units during March 2011. Volume growth was led by
12.1% yoy (down 4.3% mom) growth in the motorcycle segment, with Pulsar and Discover
accounting for ~71% of overall motorcycle sales. The three-wheeler segment recorded
13.6% yoy (down 17.1% mom) growth to 33,349 units. BAL reported slightly muted exports
growth of 7.3% yoy to 69,884 units. This was because of ~32,000 units in transit, which
would be reflected in April 2011. At `1,458, the stock is trading at 15.1x FY2012E and
13.6x FY2013E earnings. We recommend an Accumulate rating on the stock with a target
price of `1,610.
Ashok Leyland (ALL) reported better-than-expected numbers, registering a strong 20.9%
yoy (24.2% mom) increase in volumes to 12,168 units. Volume growth during the month
was aided by a strong performance from the M&HCV goods segment. M&HCV passenger
vehicles reported 7.2% yoy growth (27.7% mom), while M&HCV goods vehicles registered
a substantial 25% yoy increase (22.3% mom) in volumes. Overall, domestic M&HCV
vehicle volumes grew by 20.5% yoy. Exports, during the month, posted healthy 11.5% yoy
growth. At `58, the stock is trading at 12.3x FY2012E and 11x FY2013E earnings.
We recommend an Accumulate rating on the stock with a target price of `64.