Visit http://indiaer.blogspot.com/ for complete details �� ��
Bullish on CV growth, time to be selective
Remain bullish on domestic commercial vehicle demand
We expect solid economic growth and increasing freight rates to drive strong
demand for medium and heavy commercial vehicles (MHCVs) in FY12. Based on
our analysis and proprietary survey of transport companies, we forecast 33%/20%
MHCV volume growth in FY11/12. We also remain bullish on light commercial
vehicle (LCV) volume growth as India continues to have a low LCV/MHCV sales
ratio. We expect LCV volume to grow 28%/21% in FY11/12.
Our transporter survey indicates a strong demand environment
Our survey indicates that fleet utilisation levels are high and business conditions
continue to improve. Only 37% of transporters advanced purchases ahead of the
implementation of Euro 3 emissions standards; 47% are looking to grow their
fleets by more than 10% in FY12, while 25% remain undecided on fleet expansion.
Initiate coverage of Ashok Leyland, downgrade rating for Tata Motors
We initiate coverage of Ashok Leyland (Leyland) with a Buy rating and Rs105.00
price target. Leyland is one of our preferred picks in the sector. We consider it a
pure play on domestic MHCV growth, with strong earnings growth potential and
attractive valuations. We downgrade our rating for Tata Motors from Buy to
Neutral due to our cautious view on Jaguar Land Rover (JLR) margins, given
currency headwinds, bottoming incentives, and rising commodity prices.
Valuations high, prefer strong volume growth: M&M and Bajaj Auto
We maintain our Buy rating on Mahindra & Mahindra (M&M) as a potential
beneficiary of strong domestic LCV and utility vehicle (UV) volume growth, due
to its new UV products and LCV market share gains. Bajaj Auto remains our
preferred 2W company, benefiting from growth in domestic and export markets.
No comments:
Post a Comment