Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Decent 1Q results
M&M reported decent 1Q results with net profit up 8% YoY and 8% above our
estimates. RM/sales rose 80bps QoQ, which reflects that the pricing power is
still a tad weak; however, lower staff costs and other expenses led to 60bps
QoQ increase in Ebitda margins. Management was a bit cautious on the
demand environment but said that inventories are under control and
recent/upcoming launches should help drive volume growth. We are
upgrading our FY12-13 estimates by a modest 3-4% factoring in slightly
higher UV (incl. pick-up) volumes. Maintain BUY.
Decent 1Q results
M&M reported 1Q standalone net profit of Rs6.0bn – up 8% YoY and 8% above
estimates. RM/sales was up 80bps QoQ, which reflects that the pricing power is
still a tad weak and is a cause of some concern. 1Q Ebitda at Rs9.0bn was still
11% above estimates – thanks to lower-than-expected other expense and staff
costs. 1Q Ebitda margins were at 13.3% - up 60bps QoQ. Lower other income and
higher tax rate led to a slightly lower 8% beat at net profit vs. 11% beat at
Ebitda. EBIT margins were up 20bps QoQ in auto segment but declined 100bps
QoQ in farm equipment segment. Ebitda margins for M&M + MVML combined
were slightly higher at 14.2%. Impact of withdrawal of VAT incentive was 0.6-
0.8% of combined M&M+MVML sales, mostly borne by M&M.
Volumes growing ahead of industry helped by new launches
M&M has reported the best volume growth in autos in YTD-FY12 with UV (incl.
pick-up) and tractor volumes up 32% and 19% YoY respectively. New launches
over the last year, such as ‘Gio’ compact cab, ‘Maxximo’ mini-van and ‘Yuvraj’
tractor, have helped M&M register strong volume growth. M&M also has a strong
product roadmap for FY12-13 including launch of a new urban SUV, a compact
‘Xylo’ and ramp-up of ‘Yuvraj’. Management commentary on the demand
environment was a bit cautious but mentioned that inventory levels are under
control and several models such as ‘Scorpio’ and some pick-ups are still on wait
list. On margins, we don’t expect a meaningful recovery from 1Q levels in coming
quarters despite weakening commodity prices given rising demand side risks.
Upgrading FY12-13 estimates by 3-4%; M&M remains top pick in autos
We are upgrading our FY12-13 estimates by a modest 3-4% factoring in higher
UV (incl. pick-up) volumes. We think our volume numbers are still a tad
conservative but lean on the side of caution given risk to auto demand in the
near-term. M&M remains our top pick in the sector given better industry growth in
tractors and LCVs, minimal incremental competition and strong product line-up.
Any potential improvement in Ssangyong (to which we currently assign zero
value) remains an option value. Maintain BUY.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Decent 1Q results
M&M reported decent 1Q results with net profit up 8% YoY and 8% above our
estimates. RM/sales rose 80bps QoQ, which reflects that the pricing power is
still a tad weak; however, lower staff costs and other expenses led to 60bps
QoQ increase in Ebitda margins. Management was a bit cautious on the
demand environment but said that inventories are under control and
recent/upcoming launches should help drive volume growth. We are
upgrading our FY12-13 estimates by a modest 3-4% factoring in slightly
higher UV (incl. pick-up) volumes. Maintain BUY.
Decent 1Q results
M&M reported 1Q standalone net profit of Rs6.0bn – up 8% YoY and 8% above
estimates. RM/sales was up 80bps QoQ, which reflects that the pricing power is
still a tad weak and is a cause of some concern. 1Q Ebitda at Rs9.0bn was still
11% above estimates – thanks to lower-than-expected other expense and staff
costs. 1Q Ebitda margins were at 13.3% - up 60bps QoQ. Lower other income and
higher tax rate led to a slightly lower 8% beat at net profit vs. 11% beat at
Ebitda. EBIT margins were up 20bps QoQ in auto segment but declined 100bps
QoQ in farm equipment segment. Ebitda margins for M&M + MVML combined
were slightly higher at 14.2%. Impact of withdrawal of VAT incentive was 0.6-
0.8% of combined M&M+MVML sales, mostly borne by M&M.
Volumes growing ahead of industry helped by new launches
M&M has reported the best volume growth in autos in YTD-FY12 with UV (incl.
pick-up) and tractor volumes up 32% and 19% YoY respectively. New launches
over the last year, such as ‘Gio’ compact cab, ‘Maxximo’ mini-van and ‘Yuvraj’
tractor, have helped M&M register strong volume growth. M&M also has a strong
product roadmap for FY12-13 including launch of a new urban SUV, a compact
‘Xylo’ and ramp-up of ‘Yuvraj’. Management commentary on the demand
environment was a bit cautious but mentioned that inventory levels are under
control and several models such as ‘Scorpio’ and some pick-ups are still on wait
list. On margins, we don’t expect a meaningful recovery from 1Q levels in coming
quarters despite weakening commodity prices given rising demand side risks.
Upgrading FY12-13 estimates by 3-4%; M&M remains top pick in autos
We are upgrading our FY12-13 estimates by a modest 3-4% factoring in higher
UV (incl. pick-up) volumes. We think our volume numbers are still a tad
conservative but lean on the side of caution given risk to auto demand in the
near-term. M&M remains our top pick in the sector given better industry growth in
tractors and LCVs, minimal incremental competition and strong product line-up.
Any potential improvement in Ssangyong (to which we currently assign zero
value) remains an option value. Maintain BUY.
No comments:
Post a Comment