PINC Research has come with its December quarterly earning estimates for automobiles sector.
PINC Research earning estimates:
Hero MotoCorp posted its highest ever quarterly volumes (up 2.9% QoQ) even as competitors Bajaj Auto and TVS Motor showed fatigue with volumes declining 7.6% and 12.3% QoQ respectively.
The price hikes undertaken by manufacturers would enable them to maintain margins on a QoQ basis. Bajaj Auto's profitability is expected to get a 30bps QoQ boost due to the appreciating dollar.
Maruti Suzuki had another dreadful quarter as labour unrest during Oct'11 hampered production leading to a 28% YoY decline in volumes. Despite a richer product mix, we expect margins to be impacted by the Yen appreciation vis-vis INR. Profits expected to half to Rs 2.7 billion.
Ashok Leyland margins are expected to contract 70bps QoQ as the product mix has been diluted with the launch of the SCV 'Dost'. Profit is expected to decline 27% YoY to Rs1.1bn.
M&M automotive and tractor volumes on a YoY basis grew 31.3% and 24% respectively. We expect QoQ margin expansion owing to price hikes undertaken and higher operating leverage.
Sona Koyo is expected to report a modest 5% growth in topline as volume decline at principal client Maruti Suzuki is compensated by other OEMs. Margins expected to contract 30bps QoQ due to the impact of Yen appreciation.
Apollo Tyres consolidated profit is expected to grow 78.1% QoQ as its European subsidiary which specializes in winter tyres has its peak season.
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