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Auto Sector: Ends on a strong note !
As expected, the automobile sector’s overall sales
performance during March 2011 remained strong with all
players reporting robust numbers (both on YoY and MoM
basis) and ending FY11 on a very strong note. Within the 2-W
space, we continue to remain positive on Bajaj Auto (BAL) over
Hero Honda (HH) and in PV space, we continue to like Maruti
Suzuki (MSIL) and Mahindra & Mahindra (M&M).
Maruti Suzuki’s sales up 28% YoY: During March 2011, MSIL
sold 121,952 units (up 28% YoY and 9% MoM) with domestic
segment reporting sales of 110,424 units (up 39% YoY and 9%
MoM). It exported 11,528 units (down 26% YoY, but up 14%
MoM). The domestic PV segment reported sales of 109,804 units
(up 39% YoY and 8.3% MoM), with A2 (Compact Car) segment
reporting sales of 78,460 units (up 43% YoY and 9% MoM.) For
FY11, it ended at 1.27mn units, up 25% driven by strong
domestic sales of 1.13mn units (up 30% YoY). Export volumes
registered a drop of 6.3% YoY to138,266 units.
M&M – Auto volumes up 18.4% YoY: M&M reported sales of
57,370 units (up 20% YoY and 9.4% MoM), with auto sales at
37,522 units (up 18.4% YoY and 12.4% MoM) and tractor sales at
19,848 units (up 23% YoY and 4% MoM). Passenger UVs sales
stood at 16,302 units (up 14% both YoY and MoM). Total 4W
sales at 27,822 units were up 15% both YoY and MoM. For FY11,
it ended at 590,719 units overall, up 25% YoY driven by strong
Auto volumes at 377,065 ( up 26% YoY) and tractor volumes at
213,654 ( up 22%).
Tata Motors’ volumes up 11% YoY: Tata Motors registered
overall sales of 83,363 units, up 11% YoY and 8% MoM. The
domestic MHCV segment, with sales at 23,337 units, registered
growth of 5% YoY and 22% MoM, while domestic LCV segment
posted sales of 26,416 units (up 7% YoY and 1% MoM). Car
portfolio, at 22,841 units, registered a decline of 6% YoY and
17% MoM. Exports showed strong growth of 45% YoY and 32%
MoM with 5,932 units.
TVS Motors’ volumes surge 28% YoY: TVS Motors reported
overall sales of 191,208 units, an increase of 28% YoY and 8%
MoM. The sales were majorly driven by strong volumes in the
scooter segment, which sold 42,655 units (up 50% YoY and 6%
MoM). The motorcycles segment registered sales of 79,642
units (up 24% YoY and 11.4% MoM). Overall 2W reported sales
of 186,781 units (up 27% YoY and 8% MoM).
Hero Honda registers strong volume growth of 24% YoY:
HH registered overall sales of 515,852 units for Mar 11, up 24%
YoY and 9% MoM. On a cumulative basis, sales at 5,452,444 are
up 19% YoY.
Maruti Suzuki India
Maintain BUY – TP: Rs 1,590
MSIL sold 121,952 units (up 28% YoY and 9% MoM) in March 2011, with the domestic segment
reporting sales of 110,424 units (up 39% YoY and 9% MoM). Exports were 11,528 units (down 26%
YoY, but up 14% MoM). The domestic PC segment reported sales of 109,804 units (up 39% YoY and
8.3% MoM), with the A2 (Compact Car) segment reporting sales of 78,460 units, up 43% YoY and 9%
MoM. The A3 (Sedan) segment registered sales of 13,910 units, up 33% YoY and 7% MoM. Newly
launched Kizashi in A4 segment sold 103 units during March 2011.
For FY11, overall sales stood at 1,271,005 units (up 25% YoY), inline with our estimate of 1,264,871.
Domestic PC segment sales were 1,127,073 units (up 30%) vs our estimate of 1,111,800 units. The A2
segment sales stood at 808,552 units (up 28%) compared to our estimate of 799,200 units. Export
volumes for FY11 stood at 138,266 units vs 147,575 during FY10 (contribution of exports to
European countries at 43% as against 77% for FY10).
Valuations and recommendation: At the CMP of Rs1,274, the stock is trading at 16.4x FY11E Core
EPS of Rs62 and 13x FY12E Core EPS of Rs77.2. We maintain our BUY rating with a target price of
Rs.1,590 (core business based on 15.3x Sept 2012 earnings + Rs.84 value of sub + Rs.210 value of
cash and cash equivalents).
Mahindra & Mahindra
Maintain BUY - TP Rs 819
M&M reported sales of 57,370 units (up 20% YoY and 9.4% MoM), with auto sales at 37,522 units (up
18.4% YoY and 12.4% MoM) and tractor sales at 19,848 units (up 23% YoY and 4% MoM). Passenger
UVs sales stood at 16,302 units (up 14% both YoY and MoM). Total 4W sales at 27,822 units were up
15%, both on YoY and MoM basis. The management indicated that sales of Logan (1,018 units) got
impacted during the month due to supply side issues.
For FY11, M&M recorded overall sales of 590,719 (up 25% YoY) units, inline with our estimates of
583,944 units. For the auto segment, sales stood at 377,065 units (up 26.4%) vs our estimate of
376,083 units and 213,654 units for tractor segment (up 22.4% YoY), marginally higher by 2.8% than
our estimate of 207,860 units.
Valuations and recommendation: At the CMP of Rs710, the stock is trading at 14 FY11E core EPS of
Rs39.2 and 12.8x FY12E core EPS of Rs42.7. We continue to be positive on the company and
maintain a BUY rating with a target price of Rs819, valuing the stock at 15x Sept 2012 Core EPS +
subsidiary value of Rs168 and assign 15% to holding co discount.
Tata Motors
Not Rated
Tata Motors registered overall sales of 83,363 units, up 11% YoY and 8% MoM. Domestic MHCV sales
at 23,337 units, registered a growth of 5% YoY and 22% MoM, while domestic the LCV segment
posted sales of 26,416 units (up 7% YoY and 1% MoM). Car portfolio, at 22,841 units, registered a
decline of 6% YoY and 17% MoM. Exports showed strong growth of 45% YoY and 32% MoM with
5,932 units.
For FY11, the company posted overall volumes of 803,229 units, up 25% YoY with the MHCV
segment reporting sales of 210,643 units (up 26% YoY), LCV segment at 280,677 units (up 20% YoY),
Cars at 262,975 units (up 27%) and UVs at 43,002 units (up 26% YoY). Exports for FY11 stood at
58,044 units vs 34,140 units in FY10, up 70% YoY.
TVS Motors
Maintain BUY - TP Rs.69
TVS Motors reported overall sales of 191,208 units, an increase of 28% YoY and 8% MoM. Sales were
mainly driven by strong volumes in the scooter segment, which reported 42,655 units, up 50% YoY
and 6% MoM. The motorcycle segment registered sales of 79,642 units, up 24% YoY and 11.4%
MoM. Overall, the 2W segment reported sales of 186,781 units, up 27% YoY and 8% MoM.
For FY11, TVS Motors’ volumes were 2,046,668 units (up 33% YoY), inline with our estimate of
2,037,397 units. For the scooter segment, FY11 sales were at 466,264 units (up 51% YoY) vs our
estimate of 466,265 units. For the motorcycle segment, FY11 sales were at 8,36,831 units (up 31%
YoY) vs our estimate of 8,34,527 units. For the Moped segment, FY11 sales stood at 703,713 units (up
23% YoY) as against our estimates of 6,95,805 units.
Valuations and recommendation: At the CMP of Rs62, the stock is trading at 14.3x FY11E EPS of
Rs4.31 and 11.2x FY12E EPS of Rs5.5. We maintain BUY on the stock with a target price to Rs69
(based on 15% discount to Hero Honda’s historical PE and assigning negative value of Rs.3.2 for its
Indonesian venture).
Hero Honda
Maintain SELL; TP – Rs 1,392
Hero Honda (HH) registered overall sales of 515,852 units in March 2011, up 24% YoY and 9% MoM.
On a cumulative basis, sales are up 19% YoY at 5,452,444 units.
For FY11, Hero Honda recorded overall sales of 5,452,444 units, up 19% YoY, marginally up by 1.8%
from our estimates of 5,354,624 units.
Valuations and recommendation: At CMP of Rs1,603, the stock trades at 15.7x FY11E core EPS of
Rs87 and 16.2x FY12E core EPS of Rs87.8. We maintain SELL on the stock with target price of Rs1,392
based on 12.15x Sept 2012E core EPS and Rs236 of cash.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Auto Sector: Ends on a strong note !
As expected, the automobile sector’s overall sales
performance during March 2011 remained strong with all
players reporting robust numbers (both on YoY and MoM
basis) and ending FY11 on a very strong note. Within the 2-W
space, we continue to remain positive on Bajaj Auto (BAL) over
Hero Honda (HH) and in PV space, we continue to like Maruti
Suzuki (MSIL) and Mahindra & Mahindra (M&M).
Maruti Suzuki’s sales up 28% YoY: During March 2011, MSIL
sold 121,952 units (up 28% YoY and 9% MoM) with domestic
segment reporting sales of 110,424 units (up 39% YoY and 9%
MoM). It exported 11,528 units (down 26% YoY, but up 14%
MoM). The domestic PV segment reported sales of 109,804 units
(up 39% YoY and 8.3% MoM), with A2 (Compact Car) segment
reporting sales of 78,460 units (up 43% YoY and 9% MoM.) For
FY11, it ended at 1.27mn units, up 25% driven by strong
domestic sales of 1.13mn units (up 30% YoY). Export volumes
registered a drop of 6.3% YoY to138,266 units.
M&M – Auto volumes up 18.4% YoY: M&M reported sales of
57,370 units (up 20% YoY and 9.4% MoM), with auto sales at
37,522 units (up 18.4% YoY and 12.4% MoM) and tractor sales at
19,848 units (up 23% YoY and 4% MoM). Passenger UVs sales
stood at 16,302 units (up 14% both YoY and MoM). Total 4W
sales at 27,822 units were up 15% both YoY and MoM. For FY11,
it ended at 590,719 units overall, up 25% YoY driven by strong
Auto volumes at 377,065 ( up 26% YoY) and tractor volumes at
213,654 ( up 22%).
Tata Motors’ volumes up 11% YoY: Tata Motors registered
overall sales of 83,363 units, up 11% YoY and 8% MoM. The
domestic MHCV segment, with sales at 23,337 units, registered
growth of 5% YoY and 22% MoM, while domestic LCV segment
posted sales of 26,416 units (up 7% YoY and 1% MoM). Car
portfolio, at 22,841 units, registered a decline of 6% YoY and
17% MoM. Exports showed strong growth of 45% YoY and 32%
MoM with 5,932 units.
TVS Motors’ volumes surge 28% YoY: TVS Motors reported
overall sales of 191,208 units, an increase of 28% YoY and 8%
MoM. The sales were majorly driven by strong volumes in the
scooter segment, which sold 42,655 units (up 50% YoY and 6%
MoM). The motorcycles segment registered sales of 79,642
units (up 24% YoY and 11.4% MoM). Overall 2W reported sales
of 186,781 units (up 27% YoY and 8% MoM).
Hero Honda registers strong volume growth of 24% YoY:
HH registered overall sales of 515,852 units for Mar 11, up 24%
YoY and 9% MoM. On a cumulative basis, sales at 5,452,444 are
up 19% YoY.
Maruti Suzuki India
Maintain BUY – TP: Rs 1,590
MSIL sold 121,952 units (up 28% YoY and 9% MoM) in March 2011, with the domestic segment
reporting sales of 110,424 units (up 39% YoY and 9% MoM). Exports were 11,528 units (down 26%
YoY, but up 14% MoM). The domestic PC segment reported sales of 109,804 units (up 39% YoY and
8.3% MoM), with the A2 (Compact Car) segment reporting sales of 78,460 units, up 43% YoY and 9%
MoM. The A3 (Sedan) segment registered sales of 13,910 units, up 33% YoY and 7% MoM. Newly
launched Kizashi in A4 segment sold 103 units during March 2011.
For FY11, overall sales stood at 1,271,005 units (up 25% YoY), inline with our estimate of 1,264,871.
Domestic PC segment sales were 1,127,073 units (up 30%) vs our estimate of 1,111,800 units. The A2
segment sales stood at 808,552 units (up 28%) compared to our estimate of 799,200 units. Export
volumes for FY11 stood at 138,266 units vs 147,575 during FY10 (contribution of exports to
European countries at 43% as against 77% for FY10).
Valuations and recommendation: At the CMP of Rs1,274, the stock is trading at 16.4x FY11E Core
EPS of Rs62 and 13x FY12E Core EPS of Rs77.2. We maintain our BUY rating with a target price of
Rs.1,590 (core business based on 15.3x Sept 2012 earnings + Rs.84 value of sub + Rs.210 value of
cash and cash equivalents).
Mahindra & Mahindra
Maintain BUY - TP Rs 819
M&M reported sales of 57,370 units (up 20% YoY and 9.4% MoM), with auto sales at 37,522 units (up
18.4% YoY and 12.4% MoM) and tractor sales at 19,848 units (up 23% YoY and 4% MoM). Passenger
UVs sales stood at 16,302 units (up 14% both YoY and MoM). Total 4W sales at 27,822 units were up
15%, both on YoY and MoM basis. The management indicated that sales of Logan (1,018 units) got
impacted during the month due to supply side issues.
For FY11, M&M recorded overall sales of 590,719 (up 25% YoY) units, inline with our estimates of
583,944 units. For the auto segment, sales stood at 377,065 units (up 26.4%) vs our estimate of
376,083 units and 213,654 units for tractor segment (up 22.4% YoY), marginally higher by 2.8% than
our estimate of 207,860 units.
Valuations and recommendation: At the CMP of Rs710, the stock is trading at 14 FY11E core EPS of
Rs39.2 and 12.8x FY12E core EPS of Rs42.7. We continue to be positive on the company and
maintain a BUY rating with a target price of Rs819, valuing the stock at 15x Sept 2012 Core EPS +
subsidiary value of Rs168 and assign 15% to holding co discount.
Tata Motors
Not Rated
Tata Motors registered overall sales of 83,363 units, up 11% YoY and 8% MoM. Domestic MHCV sales
at 23,337 units, registered a growth of 5% YoY and 22% MoM, while domestic the LCV segment
posted sales of 26,416 units (up 7% YoY and 1% MoM). Car portfolio, at 22,841 units, registered a
decline of 6% YoY and 17% MoM. Exports showed strong growth of 45% YoY and 32% MoM with
5,932 units.
For FY11, the company posted overall volumes of 803,229 units, up 25% YoY with the MHCV
segment reporting sales of 210,643 units (up 26% YoY), LCV segment at 280,677 units (up 20% YoY),
Cars at 262,975 units (up 27%) and UVs at 43,002 units (up 26% YoY). Exports for FY11 stood at
58,044 units vs 34,140 units in FY10, up 70% YoY.
TVS Motors
Maintain BUY - TP Rs.69
TVS Motors reported overall sales of 191,208 units, an increase of 28% YoY and 8% MoM. Sales were
mainly driven by strong volumes in the scooter segment, which reported 42,655 units, up 50% YoY
and 6% MoM. The motorcycle segment registered sales of 79,642 units, up 24% YoY and 11.4%
MoM. Overall, the 2W segment reported sales of 186,781 units, up 27% YoY and 8% MoM.
For FY11, TVS Motors’ volumes were 2,046,668 units (up 33% YoY), inline with our estimate of
2,037,397 units. For the scooter segment, FY11 sales were at 466,264 units (up 51% YoY) vs our
estimate of 466,265 units. For the motorcycle segment, FY11 sales were at 8,36,831 units (up 31%
YoY) vs our estimate of 8,34,527 units. For the Moped segment, FY11 sales stood at 703,713 units (up
23% YoY) as against our estimates of 6,95,805 units.
Valuations and recommendation: At the CMP of Rs62, the stock is trading at 14.3x FY11E EPS of
Rs4.31 and 11.2x FY12E EPS of Rs5.5. We maintain BUY on the stock with a target price to Rs69
(based on 15% discount to Hero Honda’s historical PE and assigning negative value of Rs.3.2 for its
Indonesian venture).
Hero Honda
Maintain SELL; TP – Rs 1,392
Hero Honda (HH) registered overall sales of 515,852 units in March 2011, up 24% YoY and 9% MoM.
On a cumulative basis, sales are up 19% YoY at 5,452,444 units.
For FY11, Hero Honda recorded overall sales of 5,452,444 units, up 19% YoY, marginally up by 1.8%
from our estimates of 5,354,624 units.
Valuations and recommendation: At CMP of Rs1,603, the stock trades at 15.7x FY11E core EPS of
Rs87 and 16.2x FY12E core EPS of Rs87.8. We maintain SELL on the stock with target price of Rs1,392
based on 12.15x Sept 2012E core EPS and Rs236 of cash.
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