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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_Motogaze_April2012.pdf
Marching ahead in March!!!
PVs end year on a high; two-wheelers cooling off…
March witnessed strong volumes for most OEMs like Tata Motors (up
20.5%YoY), M&M (up 25.3% YoY) and Ashok Leyland (up 17.4% YoY).
The PV segment rebounded after a tough couple of quarters clocking
16.8% YoY growth with market leader Maruti and Tata Motors clocking
highest ever sales at ~1.25 lakh and ~38,000 units, respectively. However,
these include some amount of dealer inventory push as well. Two-wheeler
sales increased 10.3% YoY but volumes for listed players like Hero
MotoCorp, Bajaj Auto and TVS remained subdued at 2.4%, 9.6% and -
5.7%, respectively. Commercial vehicles (up 13.5% YoY) continued to be
driven by strong LCV sales (up 27.6% YoY). The M&HCV segment
witnessed marginal de-growth of 0.8% YoY on a high base of March FY11
with Tata Motors witnessing 7.5% YoY de-growth and Ashok Leyland
sales remaining flat YoY. We expect probable interest cuts coupled with a
lower base to result in higher growth for the PV segment in FY13E (~14-
16%) while the two wheeler space would be impacted by higher base
effect (I-direct estimate: 10-12%) and growth in the segment would be
primarily led by unlisted players like HMSI.
SIAM forecast for FY13E…
The Society of Indian Automobile Manufacturers (SIAM) has projected 10-
12% growth for the automobile industry in FY13E. The passenger vehicle
segment, which posted sluggish 6.1% YoY growth in FY12, is expected to
return to double-digit growth (10-12%). However, the two wheeler space,
which registered buoyant 15.7% growth in the current fiscal, is forecasted
to grow lower at 11-13%. The three-wheeler space is projected to grow at
5-7%. In the commercial space, growth is expected to be 9-11% for FY13E
primarily led by LCV growth of 14-16%. The M&HCV segment is expected
to grow at 5-7%.
Global commodities outlook…
The global commodity basket has witnessed a mixed trend with
commodities like steel and natural rubber (RSS-4) moving up 4.6% MoM
and 3.0% MoM, respectively, while aluminium has remained flat
sequentially. Natural rubber prices, which had remained above | 200/kg
for most of FY12, have shown signs of cooling off and are currently at
~| 193/kg. The season of tapping is generally slow in Q4 so prices should
remain at these levels and should later trend downwards with fresh
supplies kicking in. In our view, we believe global commodity basket
prices will remain at similar levels or even trend downwards for some
commodities going forward. However, a surge in crude oil prices to
~$120/barrel remains a concern.
Industry outlook
We maintain our view of ~11-13% volume growth in FY13E and remain
optimistic on the growth prospects of the sector. Moreover, on the
commodity front, we expect global commodity prices to remain at similar
levels although some commodities like natural rubber could trend
downwards, going ahead. The surge in crude oil prices to ~$120/barrel
level could result in further hikes in petrol prices. On an index
performance basis, the BSE Auto index has heavily outperformed the BSE
Sensex with YoY return of 8.5% vs. -10.5% during the same period.
Among our I-direct auto-coverage, we remain bullish on our ancillary
coverage universe as the OEM coverage universe seems to have rallied
significantly. We find favourable valuation in Amara Raja Batteries,
Balkrishna Industries and Bharat Forge.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_Motogaze_April2012.pdf
Marching ahead in March!!!
PVs end year on a high; two-wheelers cooling off…
March witnessed strong volumes for most OEMs like Tata Motors (up
20.5%YoY), M&M (up 25.3% YoY) and Ashok Leyland (up 17.4% YoY).
The PV segment rebounded after a tough couple of quarters clocking
16.8% YoY growth with market leader Maruti and Tata Motors clocking
highest ever sales at ~1.25 lakh and ~38,000 units, respectively. However,
these include some amount of dealer inventory push as well. Two-wheeler
sales increased 10.3% YoY but volumes for listed players like Hero
MotoCorp, Bajaj Auto and TVS remained subdued at 2.4%, 9.6% and -
5.7%, respectively. Commercial vehicles (up 13.5% YoY) continued to be
driven by strong LCV sales (up 27.6% YoY). The M&HCV segment
witnessed marginal de-growth of 0.8% YoY on a high base of March FY11
with Tata Motors witnessing 7.5% YoY de-growth and Ashok Leyland
sales remaining flat YoY. We expect probable interest cuts coupled with a
lower base to result in higher growth for the PV segment in FY13E (~14-
16%) while the two wheeler space would be impacted by higher base
effect (I-direct estimate: 10-12%) and growth in the segment would be
primarily led by unlisted players like HMSI.
SIAM forecast for FY13E…
The Society of Indian Automobile Manufacturers (SIAM) has projected 10-
12% growth for the automobile industry in FY13E. The passenger vehicle
segment, which posted sluggish 6.1% YoY growth in FY12, is expected to
return to double-digit growth (10-12%). However, the two wheeler space,
which registered buoyant 15.7% growth in the current fiscal, is forecasted
to grow lower at 11-13%. The three-wheeler space is projected to grow at
5-7%. In the commercial space, growth is expected to be 9-11% for FY13E
primarily led by LCV growth of 14-16%. The M&HCV segment is expected
to grow at 5-7%.
Global commodities outlook…
The global commodity basket has witnessed a mixed trend with
commodities like steel and natural rubber (RSS-4) moving up 4.6% MoM
and 3.0% MoM, respectively, while aluminium has remained flat
sequentially. Natural rubber prices, which had remained above | 200/kg
for most of FY12, have shown signs of cooling off and are currently at
~| 193/kg. The season of tapping is generally slow in Q4 so prices should
remain at these levels and should later trend downwards with fresh
supplies kicking in. In our view, we believe global commodity basket
prices will remain at similar levels or even trend downwards for some
commodities going forward. However, a surge in crude oil prices to
~$120/barrel remains a concern.
Industry outlook
We maintain our view of ~11-13% volume growth in FY13E and remain
optimistic on the growth prospects of the sector. Moreover, on the
commodity front, we expect global commodity prices to remain at similar
levels although some commodities like natural rubber could trend
downwards, going ahead. The surge in crude oil prices to ~$120/barrel
level could result in further hikes in petrol prices. On an index
performance basis, the BSE Auto index has heavily outperformed the BSE
Sensex with YoY return of 8.5% vs. -10.5% during the same period.
Among our I-direct auto-coverage, we remain bullish on our ancillary
coverage universe as the OEM coverage universe seems to have rallied
significantly. We find favourable valuation in Amara Raja Batteries,
Balkrishna Industries and Bharat Forge.
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