Hold Hero Motocorp, Bajaj Auto, TVS Motor: Ventura

Hero Motocorp once again surpassed its peers and reported a volume growth of 4.3% yoy to 5,34,091 units. However on a sequential basis sales were lower by 4.1% yoy as consumers deferred purchased amidst high inflation and petrol prices. Hero MoroCorp launched the 125cc bike Ignitor which will join the leader’s other offerings like Glamour and Super Splendour and will compete with Honda CBF Stunner and Bajaj Discover. We recommend a HOLD on the stock.

Bajaj Auto’s volumes dipped second time in a row led by disruption in three wheeler sales in Egypt and Sri Lanka amounting to a loss of ~15,00 units. Total volumes fell by 5.9% yoy and stood at 3,45,162 units. Motorcycle sales dipped by 1.4% yoy to 3,18,377 units as against 3,22,827 units in June’11. Most affected were the three wheeler sales which fell by 38.9% yoy to 26,785 units. The management expects the export markets of Sri Lanka to normalize by August and is optimistic of touching the 40,000 plus range for 3 wheelers. We recommend a HOLD on the stock.

TVS Motor Company  volumes fell by 7.5% yoy on account of dismal performance across all its segments. Total volumes stood at 1,68,693 units as against 1,82,455 units in June’11. Motorcycle volumes were lower by 12.3% yoy to 61,274 units whereas scooter sales fell by 13.8% yoy to 38,166 units. Moped sales were marginally higher by 2.3% yoy whereas three wheeler sales tanked by 14.8% yoy and stood at 3,255 units. Two wheeler exports also fell by a quarter and stood at 17,545 units as compared to 23,337 units in June’11. We recommend a HOLD on the stock.

Public holding more than 90% in Indian cos

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