10 July 2011

Automobiles 􀂉 1QFY12 earnings preview -- CLSA

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Automobiles
􀂉 Earnings of auto companies will come under pressure in 1QFY12 due to
moderating volume growth and rising cost pressures
􀂉 4W stocks – Maruti, Tata Motors, M&M – will report flat to low-single digit YoY
profit growth in 1Q.
􀂉 2W stocks – Hero Honda & Bajaj Auto – will outperform in 1Q with doubledigit
YoY earnings growth due to better volume growth and lesser margin
pressures than 4Ws.
􀂉 We believe that Bajaj will deliver the best earnings growth in 1Q at 30% while
Ashok Leyland will disappoint with a 33% YoY drop in earnings

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