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.
| Company | Revenue | PAT | Reco | ||||
| Rs mn | QoQ% | YoY% | Rs mn | QoQ% | YoY% | ||
| Bajaj Auto | 49,414 | -6.2 | 18.3 | 7,815 | -1.2 | 17.2 | BUY |
| Hero Motocorp | 60,604 | 4 | 17.4 | 6,190 | 2.6 | 27.7 | ACCU. |
| TVS Motor | 17,707 | -11.1 | 7.5 | 549 | -28.2 | -1.5 | BUY |
| Ashok Leyland | 28,325 | -8.5 | 27.2 | 1,120 | -27.3 | 158.2 | BUY |
| M&M | 83,001 | 12.8 | 35.6 | 6,584 | -10.7 | 6.7 | BUY |
| Maruti Suzuki | 76,314 | -2.6 | -19.6 | 2,717 | 13 | -51.9 | ACCU. |
| Apollo Tyres | 30,657 | 6.8 | 29.4 | 1,392 | 78.1 | 15.2 | ACCU. |
| Sona Koyo | 2,871 | 5.4 | 5.2 | 78 | 14.7 | -10.9 | BUY |
* ACCU. = Accumulate Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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