Dolat Capital has come with its June quarterly earning estimates for auto sector. The research firm expects margin improvement QoQ for Maruti and M&M.
Passenger Vehicles: The average monthly rate has moved up from ~205,000 vehicles sold in 1QFY12 to ~225,000 vehicles sold in 1QFY13 in the domestic market. In 1QFY13, the car segment has grown ~3% YoY, the MPV segment has declined ~6% QoQ. The smartest growth has been in the UV segment which is up ~50% YoY led by the successfully launched Maruti Ertiga. Maruti Suzuki improved its market share in this segment from 2.5% in May 2011 to 16.7% in May 2012. Commercial Vehicles: The commercial vehicles grew ~6% YoY in 1QFY13. While M&HCV sales were down ~10% YoY, the LCV sales were up ~20% YoY. Three Wheelers: The three-wheeler sales have remained flattish in 1QFY13. The sector continues to witness pressure. Two Wheelers: Two-wheeler sales were up ~11%YoY in 1QFY13. The scooter sales were up ~32% YoY, motorcycle sales were up ~6%, moped sales were up 8% YoY. Four-wheelers: While we expect Maruti’s revenue for the quarter to be up ~12% YoY, all other majors (M&M, Tata Motors, Ashok Leyland, Eicher Motors) may register growth ~25% YoY. We expect margin improvement QoQ for Maruti and M&M. Tata Motors and Ashok Leyland may register a decline in margins compared to previous quarter. Two wheelers: We expect both Hero Motocorp and Bajaj Auto to register revenue growth ~6%QoQ and 8% QoQ respectively. TVS Motors continues to be under pressure. On the margin front also, we expect both the companies to improve their margins sequentially. Recommendation:Our Top Buy: Mahindra & Mahindra, Hero Motocorp
Our Top Sell: Maruti Suzuki.
| Company | Sales (Rs-Mn) | PAT (Rs- Mn) | ||||
| Q1FY13E | QoQ(%) | YoY(%) | Q1FY13E | QoQ(%) | YoY(%) | |
| Hero Motocorp | 63,969 | 6 | 12.6 | 6,795 | 12.6 | 21.8 |
| Bajaj Auto | 50,282 | 8.1 | 5.3 | 7,852 | 1.7 | 10.4 |
| TVS Motors | 15,894 | -2.3 | -9 | 484 | -15.5 | -17.7 |
| Maruti Suzuki | 95,923 | -18.2 | 12.5 | 4,274 | -33.2 | -22.2 |
| M&M | 80,962 | -13.8 | 20.2 | 5,572 | -36.3 | -7.9 |
| Tata Motors | 388,909 | -14.3 | 26.2 | 25,861 | -55.5 | 33.3 |
| Ashok Leyland | 32,111 | -25.5 | 28.7 | 1,270 | -50.9 | 47.3 |
| Eicher Motors | 16,866 | -0.5 | 29.9 | 1,193 | 8.9 | 56.4 |
| Escorts | 7,688 | -3.3 | 4 | 118 | -34.8 | -10.6 |
| Apollo Tyres | 33,690 | 4.3 | 19.4 | 1,353 | -14.4 | 74.5 |
| Bharat Forge | 9,434 | -3.5 | 10 | 1,074 | 94.8 | 10.2 |
| Exide Inds | 13,937 | -3.7 | 12 | 1,423 | -0.1 | -12.8 |
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