India - Sector Update - Automobiles

Sector Update
Automobiles
Worst performance in recent times
The performance of Sharekhan’s automobile universe (ex-Tata

Q1FY2020 Results Preview
Motors) is expected to worsen in Q1FY2020. Demand slowdown on
Sector: Automobiles the back of sluggish economic growth, rural stress and a financing
crunch would drag down topline growth into negative territory (-4%
Sector View: Cautious y-o-y, the first drop in the past five years). A drop in sales volumes
across automotive segments is expected to drag down performance
with most automotive OEMs witnessing a drop in the topline.
Operating deleverage on account of volume slowdown and pricing
Active coverage universe pressures owing to heightened competition is expected to lead to a
CMP PT 220 bps y-o-y contraction in margins. EBIDTA and PAT are expected
Companies Reco.
(Rs) (Rs) to drop by 19% and 18% y-o-y, respectively. We expect volume
Maruti Suzuki 5,947 Hold 7,150
slowdown woes to sustain in the medium term given weak retail
Hero Motocorp 2,441 Hold 2,800
demand on the ground and a continued higher channel inventories
Bajaj Auto 2,785 Hold 3,250
across automotive segments. Cost increases on account of regulatory
TVS Motors 427 Hold 480
changes (enhanced safety features and transition to BS-VI norms)
M&M 633 Buy 810
would further dampen sentiments.
Ashok Leyland 84 Hold 100 Outlook: Volume woes to continue; earnings to remain under pressure
Apollo Tyres 186 Buy 230
Demand woes faced by automotive companies are unlikely to ease
Greaves Cotton 138 Hold 155
in the medium term. Slowing economic growth, a financing crunch
Gabriel India 103 Hold 145
and rural stress is likely to weigh on volume growth. Moreover, our
Rico Auto
Industries
55 Hold 70 channel checks suggest that the dealer inventories remain high across
categories such as two-wheelers, passenger vehicles and commercial
vehicles. Despite a steep double-digit drop in wholesale volumes in
Price chart Q1FY2020; dealer stocks are at 5-6 weeks, which is way above the
160
industry norm of four weeks, indicating weak retail demand. Adding to
150 weak sentiments on ground, consumers are faced with rising ownership
140
130
costs due to the safety norms implemented in April 2019 for two-wheelers
120 and July 2019 for four-wheelers). The transition to BS-VI emission norms
110
100
(expected from Q4FY2020) would further drive up overall costs steeply
90 by 10-12%, which would compound the problems for automakers. A
80
Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 negative operating leverage due to subdued volumes, cost pressures
Nifty Auto Nifty
and heightened competitive intensity would continue to affect earnings
of automakers in the medium term.
Valuation: Auto index underperforms since we turned cautious;
expect underperformance to continue
We have been cautious on the automotive sector since the last two
quarters, given the slowdown in growth (refer our report dated February
20, 2019). Since February 2019, the Nifty Auto index has corrected by
10%. This compares with the Nifty providing a gain of 6% in the same
period. Sustained earnings pressures an account of a volume slowdown
and rising competitive intensity mean that the sector would continue
to underperform in the medium term. We retain our cautious stance on
the sector and advise investors to stay away. In the automobile space,
we prefer M&M among the automotive OEMs due to market share gain
in Auto segment and comfortable valuation. In the ancillary space we
prefer Apollo Tyres, due to its growth in replacement segment, ramp up
of its European operations and valuation comfort. Exide Industries is also
preferred due to healthy replacement and industrial battery demand.
Key risks:
Adverse movement in raw material prices or high competitive intensity
would further weigh on earnings and can lead to further downgrades.
Leaders for Q1FY2020: TVS Motors, Bajaj Auto and Exide Industries
Laggards for Q1FY2020: Ashok Leyland, Apollo Tyres and Maruti
Suzuki
July 09, 2019 2

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Sector Update
Q1FY2020 results estimates:
Sales (Rs. cr) EBIDTA margins (%) PAT (Rs cr)
Particulars Q1 Q1 y-o-y q-o-q Q1 Q1 y-o-q q-o-q Q1 Q1 y-o-y q-o-q
FY20E FY19 (%) (%) FY20E FY19 (bps) (bps) FY20E FY19 (%) (%)
Maruti Suzuki 18,654.9 22,459.4 -16.9 -13.1 11.3 14.9 -357.6 79.7 1,467.1 1,975.3 -25.7 -18.3
Hero Motocorp 8,264.0 8,809.8 -6.2 4.8 13.4 15.6 -227.5 -20.3 758.4 909.2 -16.6 3.8
Bajaj Auto 7,611.3 7,419.3 2.6 2.9 15.1 17.3 -221.7 -66.2 1,057.4 1,115.2 -5.2 9.7
TVS Motors 4,683.7 4,168.5 12.4 6.8 7.3 7.7 -38.6 29.1 150.3 146.6 2.5 12.3
M&M # 12,563.2 13,357.7 -5.9 -9.0 14.8 15.8 -100 126.6 1,023.0 1,232.7 -17.0 -4.7
Ashok Leyland 5,545.6 6,250.1 -11.3 -37.3 7.7 10.4 -270.9 -348.8 200.5 391.0 -48.7 -69.8
Apollo Tyres @ 4,314.1 4,288.0 0.6 0.9 10.8 12.3 -148.4 89.6 169.7 251.8 -32.6 -7.8
Greaves Cotton 504.0 458.2 10.0 -4.6 13.4 13.3 14.1 18.9 44.0 39.8 10.5 -12.4
Gabriel 463.2 514.6 -10.0 -9.2 7.2 9.5 -234.9 45.4 16.6 26.7 -37.8 -3.9
Rico Auto @ 363.1 349.1 4.0 4.4 8.0 11.3 -331.6 79.7 8.5 20.1 -57.6 20.5
Soft Coverage:
Tata Motors @ 54,005.1 66,701.1 -19.0 -37.5 6.1 7.6 -145.2 -315.9 -1,827.3 -1,902.4 -3.9 -182.1
Eicher Motors @ 2,409.6 2,547.8 -5.4 -3.6 27.1 31.8 -463.8 -24.8 496.7 576.2 -13.8 -8.8
Exide Industries 2,633.8 2,772.5 -5.0 1.4 14.5 14.2 38.0 18.6 201.1 209.9 -4.2 -4.5
Bharat Forge 1,553.6 1,479.7 5.0 -6.9 28.4 29.0 -52.3 -62.0 250.4 234.5 6.8 -6.3
Ceat @ 1,706.3 1,706.3 0.0 -3.1 8.1 10.3 -217.7 -109.4 49.6 74.3 -33.3 -52.7
Jk Tyres @ 2,512.7 2,439.5 3.0 -7.1 8.2 13.3 -518.8 -149.2 -2.9 87.8 -103.3 -107.9
Minda Industries @* 1,412.1 1,429.8 -1.2 -5.0 12.3 11.9 38.2 -19.6 65.7 70.1 -6.2 -10.6
Subros 499.8 531.7 -6.0 -3.5 10.8 10.7 7.3 18.1 20.3 22.3 -9.0 25.0
Sundram 971.0 971.0 0.0 -3.7 17.9 18.2 -28.7 42.0 97.8 106.2 -7.9 -10.7
Fasteners
Endurance 1,934.9 1,860.4 4.0 1.8 13.9 14.6 -67.9 -483.2 112.9 124.6 -9.4 -37.3
Technologies @
Motherson Sumi @* 16,269.3 14,775.5 10.1 -5.2 7.5 9.6 -205.7 26.2 410.7 443.1 -7.3 0.2
GNA Axles 225.3 212.6 6.0 -7.0 16.5 14.9 161.0 52.4 17.1 14.0 21.8 -4.8
Escorts 1,395.1 1,511.3 -7.7 -14.5 11.1 12.3 -120.9 -56.2 97.1 119.6 -18.8 -20.0
Suprajit 369.0 361.7 2.0 -14.4 13.1 15.3 -218.2 -159.5 29.3 28.8 1.8 -29.7
Engineering @
Lumax Auto 289.7 333.0 -13.0 -3.9 8.4 10.0 -166.2 -29.0 12.9 18.1 -28.6 -1.8
Technologies @
Lumax Industries @ 446.6 496.2 -10.0 3.2 8.0 8.2 -21.8 89.3 14.4 20.0 -28.2 1.0
Alicon Castalloy @ 281.9 296.7 -5.0 -10.1 12.0 10.9 105.4 16.6 11.3 12.3 -8.4 -29.1
Auto Universe 151,882.8 168,501.3 -9.9 -21.1 9.8 11.5 -168.5 -86.1 4,952.7 6,367.7 -22.2 -50.6
Auto universe (ex 97,877.8 101,800.3 -3.9 -7.8 11.9 14.1 -222.3 3.4 6,780.0 8,270.1 -18.0 -13.1
TAMO)
Source: Company, Sharekhan Research; # MM+MVML ; @ Consolidated; @* not comparable due to acquisition;
July 09, 2019 3

Sector Update
Valuation
Price EPS (Rs) P/E (x)
Companies Reco target CMP (Rs) FY19 FY20E FY21E FY19 FY20E FY21E
(Rs)
Maruti Suzuki Hold 7,150 5,947 248.3 251.5 297.2 24.0 23.6 20.0
Hero Motocorp Hold 2,800 2,441 169.5 167.1 173.2 14.4 14.6 14.1
Bajaj Auto Hold 3,250 2,785 149.8 163.5 179.4 18.6 17.0 15.5
TVS Motors Hold 480 427 14.1 14.3 17.3 30.3 29.9 24.7
M&M @ Buy 810 633 43.6 37.6 38 14.5 16.8 16.7
Ashok Leyland Hold 100 84 7.0 5.7 5.8 12.0 14.7 14.5
Apollo Tyres # Buy 230 186 15.4 15.4 17.9 12.1 12.1 10.4
Greaves Cotton Hold 155 138 7.5 7.5 7.8 18.4 18.4 17.7
Gabriel India Hold 145 103 6.6 6.4 7.2 15.6 16.1 14.3
Rico Auto Industries # Hold 70 55 4.5 4.6 5.1 12.2 12.0 10.8
Soft Coverage
Eicher Motors # Neutral 19,038 809.5 871.2 903.5 23.5 21.9 21.1
Exide Industries Positive 200 8.7 9.8 10.3 23.0 20.4 19.4
CEAT # Neutral 905 62.3 58.7 72.9 14.5 15.4 12.4
Sundram Fasteners # Neutral 474 21.8 22.3 24.0 21.7 21.3 19.8
Endurance Technologies # Neutral 1,002 35.2 40.7 46.8 28.5 24.6 21.4
JK Tyre & Industries # Neutral 76 7.2 12.9 15.5 10.6 5.9 4.9
Lumax Industries# Neutral 1,232 72.3 72.9 87.2 17.0 16.9 14.1
Minda Industries # Neutral 275 10.68 11.56 14.28 25.7 23.8 19.3
Escorts Neutral 537 53.2 56.8 59 10.1 9.5 9.1
Subros # Neutral 234 11.7 13.2 15 20.0 17.7 15.6
GNA Axles Positive 249 30.7 32.2 32.9 8.1 7.7 7.6
Suprajit Engineering # Neutral 202 9.6 9.3 10.3 21.0 21.7 19.6
Lumax Auto Positive 103 9.6 9.1 10.7 10.7 11.3 9.6
Technologies#
Tata Motors# Neutral 156 -84.9 5.7 12.3 -1.8 27.4 12.7
Tata Motors- DVR # Neutral 75 -84.9 5.7 12.3 -0.9 13.2 6.1
Bharat Forge # Neutral 454 22.16 24.65 24.96 20.5 18.4 18.2
Motherson Sumi # Neutral 118 5.1 4.9 5.7 23.1 24.1 20.7
Alicon Castalloy Limited # Positive 537 39.6 46.4 56.3 13.6 11.6 9.5
Source: Company, Sharekhan Research .@-MM & MVML; #- Consolidated;
July 09, 2019 4

Sector Update
Q1FY2020E results: Comments on individual companies
Companies Expectations
Maruti Suzuki Revenue to fall steeply 17% led by weak demand and high inventory; first instance of drop in five
years. Operating deleverage to impact margins leading to 26% drop in profit after tax (PAT).
Hero Motocorp Second consecutive quarter of double-digit volume drop due to rural stress and high inventory, is
likely to lead to revenue drop of 6%. A decline in margins due to operating de-leverage and higher
discounting would drag down PAT by 17%.
Bajaj Auto Contrary to the declining auto industry, Bajaj’s topline is expected to grow by 3%. Volume growth
due to market share gains domestically and healthy export volumes to drive revenues. Operating
margins to drop 220 bps y-o-y to 15.1%; lowest margins in the decade due to pricing aggression in
domestic market to gain share. We expect net profit to drop 5% y-o-y.
TVS Motors Increasing share of non-moped and three-wheeler segment, price hikes are likely lead to 12% topline
growth. Volumes have marginally dropped by 2% due to weakness in the moped segment and slow
growth in the non–mopeds space. Operating margins are set to drop slightly by 40 bps due to
increased competitive intensity. Net profit growth is expected to moderate to 3%.
M&M The company is likely to report its first-ever drop in topline in the past ten quarters. Lower volumes
in both the automotive and tractor segment to lead to 6% revenue decline. Operating margins to
drop 100 bps y-o-y due to increased discounting and operating deleverage. Net Profit is expected
to drop by 17%.
Ashok Leyland A double-digit drop in MHCV volumes due to slowing economic growth and axle load norms to
drag down topline by 11%. Operating margins to drop sharply by 270 bps y-o-y due to operating
deleverage and increased discounting. Net profit is likely to almost halve.
Apollo Tyres Topline to moderate sharply, resulting in flat growth in Q1FY2019-20. A drop in OEM demand and
moderation in replacement segment would affect growth. Rising raw material prices and pricing
pressures to result in 150 bps y-o-y drop in margins. Higher depreciation to further impact profitability;
expect a 33% drop in PAT.
Greaves Cotton Q1FY2020 numbers not comparable on y-o-y basis due to acquisitions.
Gabriel Steep volume in OEM segment to lead to 10% volume drop; first instance of drop in past three
years. Margins to drop sharply 230 bps y-o-y driven by pricing pressures from OEM’s and operating
deleverage. PAT to drop 38% y-o-y
Rico Auto Industries Weak demand from domestic OEMs to continue impacting Rico’s topline growth; expect revenue
growth of 4% in Q1FY20. Margins to drop sharply 330 bps y-o-y due to pricing pressures from OEM’s.
Higher interest expenses to further dent net profit; expect a 60% y-o-y drop in PAT.
Tata Motors Double-digit volume drop across both standalone business and JLR business to impact topline;
expect consolidated revenues to drop 19% y-o-y. Margins of the JLR business are likely to improve
marginally 40 bps y-o-y to 6.6% due to a reduction in raw material prices. JLR is likely to post a
loss of GBP 114 million. Standalone margins to drop by 510 bps y-o-y due to poor mix, increased
discounting and a steep drop in volumes. Consolidated margins to drop 150 bps y-o-y. We expect a
net loss of Rs. 1,827 crore at consolidated level.
Eicher Motors Topline to drop 5% driven by a double-digit drop in volumes due to weak demand and market share
loss to competition. Realisations are likely to grow strongly by 16%, driven by a better mix and price
hikes. Operating margins are likely to drop sharply by 470 bps y-o-y due to pricing pressures on
account of competition and increased marketing expenditure.
Exide Industries Revenue expected to drop by 5% due to drop in domestic auto OEM demand and slowdown in
industrial revenue. Operating margins are expected to improve marginally 30 bps y-o-y to 14.5%. Net
Profit is expected to drop 4% y-o-y.
Bharat Forge Weakness in domestic demand to lead to moderation in demand; topline growth to moderate to 5%.
Operating margins to drop marginally 60 bps y-o-y. Net Profit is expected to grow 7%
Ceat A steep drop in OEM volumes and moderation in the replacement segment to lead to a flat topline.
Discounts due to increased competition is likely to lead to a 220 bps y-o-y fall in operating margins.
Net Profit is expected to drop by 33% y-o-y.
JK Tyres Weak OEM demand and a slowdown in the replacement market is set to cause topline growth to
moderate sharply; we expect revenue growth to moderate to 3% as against double-digit earlier.
Operating margins to fall steeply 530 bps y-o-y due to increased raw material prices and pricing
pressures. We expect company to report marginal loss in Q1FY2020.
Minda Industries Q1FY2020 numbers not comparable y-o-y due to acquisitions.
Subros Steep fall in key customer Maruti Suzuki volumes to impact topline. Expect revenues to drop 6%.
Operating margins to remain flat on y-o-y basis. Higher taxation to impact profitability; expect Net
Profit to drop 9% y-o-y.
July 09, 2019 5

Sector Update
Q1FY2020E results: Comments on individual companies
Companies Expectations
Sundram Fasteners A steep drop in domestic OEM demand to lead to substantial slowdown in growth; we expect
topline to be flat as against a double-digit drop earlier. Operating margins are expected to contract
marginally by 30 bps to 17.9%. Lower other income and higher depreciation to impact profits. Net
Profit is expected to drop by 8% y-o-y
Endurance Technol- Demand moderation for key customer Bajaj Auto would lead to topline growth slowing down to 4%
ogies in Q1FY2020. Pricing pressures by OEMs to lead to operating margins contracting 70 bps y-o-y to
13.9%. Higher depreciation to affect profitability; we expect net profit to drop by 9% y-o-y
Motherson Sumi Q1FY2020 numbers are not comparable on a y-o-y basis due to acquisitions.
Systems
GNA Axles Export is likely to grow strongly in double digits. However, a huge fall in domestic demand is likely to
drag topline growth to 6% in Q1FY2020. Operating margins are expected to improve 160 bps y-o-y
driven by price hikes and better mix. Net profit is expected to grow strongly 22% y-o-y.
Escorts The company is likely to see its first instance of a drop in topline in the past three years. A fall in
tractor volumes would lead to revenues declining by 8% y-o-y. Operating deleverage is likely to
result in a 120 bps y-o-y drop in margins to 11.1%. Expect Net Profit to fall by 19% y-o-y.
Suprajit Engineering A sharp drop in domestic OEM demand is set to largely offset growth in the lamps and non-cables
business. We expect topline growth to moderate to 2%. Adverse mix and pricing pressures from
OEMs would drag down margins by 220 bps y-o-y. Higher other income is likely to offset a decline
in operating performance; we expect net profit to grow marginally by 2% in Q1FY20.
Lumax Auto Tech- Numbers are not comparable on y-o-y basis due to demerger of the SMT unit.
nologies
Lumax Industries Second consecutive quarter of double-digit topline drop likely due to contraction in OEM demand.
Operating margins are expected to drop marginally by 20 bps y-o-y to 8%. Higher interest expenses
and a drop in profit of associates would affect performance further. We expect net profit to drop 28%
y-o-y.
Alicon Castalloy Revenue expected to drop by 5% given demand decline in the domestic market. EBIDTA expected
to improve 110 bps y-o-y due to better mix and decline in raw material costs. Higher interest and
depreciation expenses are expected to drag profitability. We expect net profit to decline by 8% y-o-y.
Source: Company, Sharekhan Research

July 09, 2019 6

Sector Update
Key points
Sharekhan Universe’s topline to contract in Q1FY2020; first drop in past five years: The Sharekhan
auto universe’s topline (ex–TAMO) for Q1FY2020 is expected to decline after several quarters of healthy
growth. We expect the universe’s revenue to drop by 4% y-o-y, the first instance in the past five years.
Wholesales across segments have fallen sharply leading to a majority of OEMs seeing a drop in revenue
during the quarter. Slowing economic growth, liquidity crunch and rural stress have dented demand.
Moreover, adverse regulatory changes such as increased axle-load norms and increased cost due to
ABS/CBS norms have affected dispatches of CVs and two-wheelers, respectively. Passenger vehicle (PV)
segment sales volumes dropped by 17% y-o-y, while CV sales volumes have dropped by 11%. Two-wheeler
manufacturers were no exception to the agony, with dispatches dropping by ~ 11% y-o-y for the quarter.
For OEMs, topline growth is expected to drop by 8% in Q1FY2020. On the contrary, the auto ancillary
companies are expected to be better-off, aided by a healthy performance in the exports and aftermarket
segments. Ancillary companies in our universe are expected to see topline growing by 4% y-o-y. In the
OEM space, we expect TVS Motors and Bajaj Auto’s revenue to grow by 12% and 3% y-o-y, attributable
to a favourable product mix and price hikes taken on account of a regulatory changes. In the ancillary
space, we expect Bharat Forge to report a 5% growth in topline, while Greaves Cotton is likely to report a
10% growth. Tyre major Apollo Tyres is expected to report a marginal growth.
Margins to contract 220 bps y-o-y due to operating de-leverage and pricing pressures; earnings to drop
by 18%: Operating margins of the Sharekhan Auto universe (ex-Tamo) are expected to be under pressure
and decline by a whopping 220 bps y-o-y, largely due to the OEM segment. Multiple factors, which include
operating de-leverage (due to a decline in volumes across segments), elevated cost pressures attributable
to increased discounts and heightened competitive pressures is expected to drag down margins. On the
operational front, TVS Motor, on the back of a favourable mix is expected to outperform, reporting a decline
of just 39 bps y-o-y, while M&M is expected to relatively outperform the industry reporting a margin drop of
100 bps y-o-y. PV industry leader Maruti Suzuki is expected to underperform, reporting a steep decline of
358 bps y-o-y. OEM margins are estimated to drop 240 bps y-o-y. Slowing topline growth and pressures
from OEMs would also affect margins of ancillary players whose margins are expected to decline by 170
bps y-o-y. Tracking weak operating performance, we expect our automobile universe’s PAT (ex-TAMO) to
drop by 18% y-o-y.
Outlook: Automobile volume woes to continue; earnings to remain under pressure: Demand woes faced
by automotive companies are unlikely to ease in the medium term. Slowing economic growth, a financing
crunch and rural stress is likely to weigh on volume growth. Moreover, our channel checks suggest that
the dealer inventories remain high across categories such as two-wheelers, passenger vehicles and
commercial vehicles. Despite a steep double-digit drop in wholesale volumes in Q1FY2020; dealer stocks
are at 5-6 weeks, which is way above the industry norm of four weeks, indicating weak retail demand.
Adding to weak sentiments on ground, consumers are faced with rising ownership costs due to the safety
norms implemented in April 2019 for two-wheelers and July 2019 for four-wheelers). The transition to BS-VI
emission norms (expected from Q4FY2020) would further drive up overall costs steeply by 10-12%, which
would compound the problems for automakers. A negative operating leverage due to subdued volumes,
cost pressures and heightened competitive intensity would continue to affect earnings of automakers in
the medium term.
Valuation: Auto index underperforms since we turned cautious; expect it to remain subdued: We have
been cautious on the automotive sector since the last two quarters, given the slowdown in growth (refer
our report dated February 20, 2019). Since February 2019, the Nifty Auto index has corrected by 10%.
This compares with the Nifty providing a gain of 6% in the same period. Sustained earnings pressures an
account of a volume slowdown and rising competitive intensity mean that the sector would continue to
underperform in the medium term. We retain our cautious stance on the sector and advise investors to stay
away. In the automobile space, we prefer M&M among the automotive OEMs due to market share gain in
Auto segment and comfortable valuation. In the ancillary space we prefer Apollo Tyres, due to its growth
in replacement segment, ramp up of its European operations and valuation comfort. Exide Industries is
also preferred due to healthy replacement and industrial battery demand.
July 09, 2019 7

Sector Update
Q1FY2020 Automobiles earnings preview
Maruti Suzuki
Comments
Revenues are expected to decline steeply by 17% y-o-y, owing to an 18% drop in volumes. Weak consumer
buying sentiment and higher channel inventories dragged down volumes. Realizations are likely to be flat.
Operating profit is likely to decline by 37% y-o-y to Rs. 2,116 crore, while operating margins are likely to
contract by 360 bps to 11% on the back of a high raw material prices, operating de-leverage and elevated
cost pressures
Adjusted PAT is expected to drop by 26% y-o-y to Rs 1,467 crore.
Key Monitorables: 1. Management commentary on demand and channel inventories. 2. Discounting levels
3.Pricing action triggered by regulatory changes
Quarter ended Rs. cr.

Particulars Q1FY20E Q1FY19 % YoY Q4FY19 % QoQ
Revenues 18,654.9 22,459.4 -16.9 21,459.4 -13.1
EBIDTA 2,116.3 3,351.1 -36.8 2,263.4 -6.5
Adjusted PAT 1,467.1 1,975.3 -25.7 1,795.6 -18.3
EPS 48.6 65.4 -25.7 59.4 -18.3
Gross Margin (%) 28.5 31.0 (250) bps 28.1 40 bps
EBIDTA Margins (%) 11.3 14.9 (360) bps 10.5 80 bps
Source: Company; Sharekhan estimates
Hero Motocorp
Comments
Topline is expected to decline by 6% y-o-y aided by a steep 12% decline in volumes, attributable to weak
demand and high channel inventories. Realizations are up 7% y-o-y aided by cost increases on account of
ABS / CBS regulations.
Operating profit to decline by 20% y-o-y while operating margins are likely to drop 220 bps to 13.4% due
to operating de-leverage and cost pressures.
Tracking the weak operating performance PAT is expected to decline 17% to Rs 758 cr.
Key Monitorables: 1. Management commentary on demand and channel inventories 2. Impact of regulatory
changes.

Particulars Q1FY20E Q1FY19 %YoY Q4FY19 %QoQ
Total Income 8,264.0 8,809.8 -6.2 7,885.0 4.8
EBIDTA 1,103.9 1,377.3 -19.8 1,069.3 3.2
PAT 758.4 909.2 (16.6) 730.3 3.8
EPS 38.0 45.5 (16.6) 36.6 3.8
Gross Margin (%) 31.4 30.0 140 bps 31.0 40 bps
EBIDTA Margins (%) 13.4 15.6 (220) bps 13.6 (20) bps
July 09, 2019 8

Sector Update
Bajaj Auto
Comments
Topline is expected to grow by 3% y-o-y aided by a 2% growth in volumes attributable to market share
gains in the motorcycle segment and healthy export volumes. Realisations are up likely to be up 1% on the
back of favorable mix price increases, owing to ABS / CBS regulations.
Operating profits to decline by 11% y-o-y while operating margins are likely to drop by 220 bps to 15.1% due
to aggressive pricing stance.
Tracking the weak operating performance, PAT is expected to decline 5% to Rs. 1,057 crore.
Key monitorables: 1. Management commentary on demand in both domestic as well as exports. 2. Channel
inventories 3. Pricing actions 4. Effect of regulatory changes.

Total Income 7,611.3 7,419.3 2.6 7,395.2 2.9
EBIDTA 1,145.8 1,281.4 -10.6 1,162.3 -1.4
Adjusted PAT 1,057.4 1,115.2 -5.2 963.6 9.7
EPS 36.6 38.6 -5.2 33.3 9.7
Reported PAT 1,057.4 1,115.2 -5.2 1,305.6 -19.0
Gross Margin (%) 27.7 28.6 (90) bps 27.7 -
TVS Motors
Comments
The topline is expected to grow by a sturdy 12% y-o-y aided by a 14% y-o-y growth in realizations attributable
to a favorable product mix (low share of low priced mopeds) and price hike taken on account of ABS / CBS
regulations. Volumes dropped by 2%.
Operating profits to grow 7% y-o-y to Rs 343 cr while operating margins are likely to drop 40 bps to 7.3%.
Tracking the operating performance PAT is expected to grow 3% to Rs. 150 crore.
Key Monitorables: 1. Management commentary on demand. 2. Channel inventories 3. Effect of regulatory
changes

Total Income 4683.7 4168.5 12.4 4384.0 6.8
Adj EBIDTA 342.8 321.2 6.7 308.1 11.3
Adj PAT 150.3 146.6 2.5 133.8 12.3
EPS 3.2 3.1 2.5 2.8 12.3
EBIDTA Margins (%) 7.3 7.7 (40) bps 7.0 30 bps
July 09, 2019 9

Sector Update
M&M
Comments
Revenue are expected to drop 6% y-o-y for the quarter on the back of a drop in the auto as well as tractor
segment revenues. Blended volumes have declined 10%, while realisations are expected to grow by 4%.
The operating profit for the quarter is expected to drop 12% while operating margins to decline 100 bps to
14.8% on the back of operating de-leverage and elevated cost pressures. EBIT margins of the auto and
tractor segments are expected to drop 60 bps and 290 bps y-o-y respectively.
Tracking the operating performance the adjusted PAT is expected to decline 17% y-o-y to Rs. 1,023 crore.
Key monitorables: 1. Demand outlook on the auto and tractor industry 2. Channel inventories 3.Discounting
levels 4. Updates on electric vehicles

Revenue 12,563.2 13,357.7 -5.9 13,807.9 -9.0
EBITDA 1,858.4 2,110.1 -11.9 1,867.8 -0.5
Adjusted PAT 1,023.0 1,232.7 -17.0 1,074.0 -4.7
EPS 8.2 9.9 -17.0 8.6 -4.7
EBITDA margin (%) 14.8 15.8 (100) bps 13.5 130 bps
Ashok Leyland
Comments
Revenue are expected to drop by 11% y-o-y to Rs. 5,546 crore led by a double digit drop in MHCV volumes
due to slowing economic growth and impact of revised axle load norms .
Operating profits to decline steeply by 35% y-o-y, while margins are likely to contract by 270 bps y-o-y as
muted sales and elevated discounting levels in the industry would overweigh.
Tracking the weak operating performance PAT is expected to decline 49% to Rs 200 cr.
Key Monitorables: 1.Demand outlook with respect to possibility of a pre-buy 2. Channel inventories
3.Discounts in the CV industry

Net sales 5545.6 6250.1 -11.3 8845.9 -37.3
Operating profit 424.3 647.5 -34.5 985.4 -56.9
Adjusted PAT 200.5 391.0 -48.7 664.7 -69.8
Adjusted EPS 0.7 1.4 -48.7 2.3 -69.8
Gross Margin(%) 28.1 30.4 (230) bps 27.3 80 bps
OPM (%) 7.7% 10.4% (270) bps 11.1% (340) bps
July 09, 2019 10

Sector Update
Apollo Tyres (Consolidated)
Comments
Revenues are expected to be flat on a y-o-y basis given the weak demand from domestic OEMs as well as
aftermarkets segment.
Operating profits are likely to decline 12% y-o-y while the operating margins are likely to contract by 150
bps y-o-y to 10.8% due to cost pressures.
A likely rise in depreciation cost is expected to result in a 33% decline in PAT to Rs. 170 crore
Key Monitorables: 1 OEM demand outlook 2. Raw material costs 3. Ramp-up of the Hungary plant

Revenue 4,314.1 4,288.0 0.6 4,273.7 0.9
EBITDA 467.3 528.1 (11.5) 424.6 10.0
Adjusted PAT 169.7 251.8 -32.6 184.0 -7.8
EPS (Rs) 3.3 4.9 -32.6 3.6 -7.8
EBITDA margin (%) 10.8% 12.3% (150) bps 9.9% 90 bps
Greaves Cotton
Comments
Revenues are expected to grow 10% y-o-y to Rs 504 cr aided by growth in the aftermarket segment
and farm equipment and the genset business. Q1FY2020 numbers not comparable on y-o-y basis due to
acquisitions.
Operating profits are likely to grow by 11% y-o-y to Rs 68 crore, while operating margins are likely to be
almost flat (up by 10 bps y-o-y) to 13.4%.
Tracking the operating performance, adjusted PAT is likely to grow 11% y-o-y to Rs 44 crore.
Key Monitorables: 1 OEM demand outlook for the engines business and aftermarkets 2. Raw material
costs 3. Increasing geographic reach

Revenues 504.0 458.2 10.0 528.1 -4.6
EBITDA 67.7 60.9 11.2 70.0 -3.2
Adjusted PAT 44.0 39.8 10.5 50.3 -12.4
Adjusted EPS 1.80 1.63 10.5 2.06 -12.4
Gross margins (%) 31.0 32.5 (150) BPS 30.2 80 BPS
EBITDA margins (%) 13.4 13.3 10 BPS 13.3 10 BPS
July 09, 2019 11

Sector Update
Gabriel India
Comments
Revenues expected to decline by 10% y-o-y to Rs 463 crore aided by a slow down in demand across
OEM’s.
Operating profits likely to drop 32% y-o-y while operating margins expected to decline by 230 bps y-o-y
to 7.2%. Operating de-leverage and elevated cost pressures are likely to affect operating margins
Tracking weak operating performance, PAT is likely to decline by 38% y-o-y
Key monitorables: 1. Management commentary on demand outlook from OEMs 2. New customer additions
or increase in share of business 3. Cost pressures

Net Sales 463.2 514.6 (10.0) 510.3 (9.2)
EBIDTA 33.2 49.0 (32.2) 34.3 (3.1)
Adjusted Net Profit 16.6 26.7 (37.8) 17.3 (3.9)
EPS 1.2 1.9 (37.8) 1.2 (3.9)
EBITDA Margin % 7.2 9.5 (230) bps 6.7 50 bps
Rico Auto: (Consolidated)

Comments
Revenue growth is likely to slow down to 4% y-o-y to Rs 363 crore on account of a slowing demand from
OEM’s, especially Hero MotoCorp, which is a key customer.
Operating profits are likely to decline steeply by 27% y-o-y to Rs. 29 crore while the operating margins are
likely to decline by 330 bps y-o-y to 8% primarily due to pricing pressure from OEM’s.
The adjusted PAT is expected to decline sharply by 58% y-o-y to Rs. 9 crore.
Key monitorables: 1 OEM demand outlook and aftermarkets traction 2. Margin outlook

Revenues 363.1 349.1 4.0 347.8 4.4
EBITDA 29.1 39.5 -26.5 25.1 15.9
Adjusted PAT 8.5 20.1 -57.6 7.1 20.5
Adjusted EPS 0.6 1.5 -57.6 0.5 20.5
EBITDA Margins (%) 8.0 11.3 (330) bps 7.2 80 bps
July 09, 2019 12

Sector Update
Eicher Motors: (Consolidated)
Comments
Topline is expected to decline 5% y-o-y aided by a steep 19% decline in volumes, while realizations
increased ~ 15%. A weak demand, price hikes on account of the new ABS norms and a higher channel
inventories adversely impacted the topline.
Operating profit to decline by 19% y-o-y, while operating margins are likely to drop 470 bps to 27.1% due
to operating de-leverage and competitive pressures leading to aggressive pricing.
The Share of the profits from JV (CV business) is also expected to drop 42% y-o-y. Consequently, we
expect adjusted PAT to drop 14% to Rs. 497 crore.
Key monitorables: 1. Management commentary on demand and new product interventions. 2. Channel
inventories 3. Effect of regulatory changes on pricing. 4. Competitive intensity.

Total Income 2409.6 2547.8 -5.4 2500.1 -3.6
EBIDTA 653.9 809.6 -19.2 684.7 -4.5
Share of JV (CV Business) 37.5 64.3 -41.6 75.5 -50.2
Adjusted Profit 496.7 576.2 -13.8 544.8 -8.8
EPS 182.5 211.8 -13.8 200.2 -8.8
Gross Margin (%) 46.3 48.5 (220) bps 46.6 (30) bps
Exide Industries
Comments
Revenue is expected to decline by 5% y-o-y for the quarter due to a slowdown in demand across OEM
segments.
Operating profits are likely to increase 8% y-o-y while operating margins are expected to expand 30 bps
y-o-y to 14.5%. An improvement in gross margins is expected to drive the operating margin expansion.
In line with the operating performance, PAT is likely to decline 4% to Rs 201 crore.
Key Monitorables: 1. Demand outlook from OEMs 2. New product addition / upgradations 3. Cost pressures

Revenues 2,633.8 2,772.5 (5.0) 2,598.7 1.4
EBIDTA 383.2 392.9 (2.5) 373.3 2.7
Adjusted PAT 201.1 209.9 (4.2) 210.7 -4.5
EPS 2.4 2.5 (4.2) 2.5 -4.5
Gross Margin (%) 34.7 33.6 110 bps 35.1 (40) bps
EBIDTA Margins (%) 14.5 14.2 30 bps 14.4 10 bps
July 09, 2019 13

Sector Update
CEAT: (Consolidated)
Comments
Revenues are expected to be flat y-o-y given weak demand from OEMs and replacement segments
Operating profits are likely to decline 21% y-o-y while the operating margins are likely to contract 220 bps
y-o-y to 8.1% due to cost pressures triggered by operating de-leverage.
A likely rise in interest and depreciation cost is expected to result in a 33% decline in PAT to Rs. 12 crore
Key Monitorables: 1 OEM demand outlook 2. Raw material costs 3. Capex plans

Revenues 1706.3 1706.3 0.0 1760.5 -3.1
EBIDTA 138.7 175.8 -21.1 162.3 -14.6
Adj Net Profit 49.6 74.3 -33.3 104.8 -52.7
EPS 12.3 18.4 -33.3 25.9 -52.7
Gross margin (%) 38.8 39.3 (50) bps 39.3 (50) bps
Sundram Fasteners
Comments
Revenues are expected to be flat y-o-y as growth in the exports markets is expected to be offset completely
by subdued demand in the domestic OEMS.
Operating profits likely to decline marginally by 2% y-o-y to Rs. 174 crore while operating margins are
expected to contract 30 bps y-o-y to 17.9%. Elevated cost pressures amid subdued topline are expected to
affect margins.
Higher depreciation and lower other income is likely to aggravate the decline in adjusted PAT to 8%.
Key monitorables: 1.Demand outlook in the domestic markets 2. New client / product additions

Revenues 971.0 971.0 0.0 1008.3 -3.7
EBITDA 173.8 176.6 -1.6 176.3 -1.4
Adjusted PAT 97.8 106.2 -7.9 109.5 -10.7
Adjusted EPS 4.7 5.1 -7.9 5.2 -10.7
EBITDA Margins (%) 17.9 18.2 (30) bps 17.5 40 bps
July 09, 2019 14

Sector Update
Endurance Technologies: (Consolidated)
Comments
Topline growth is expected to slow down to 4% given the weakness in demand from the auto OEMs in
domestic as well as exports markets.
Operating profit is expected to be almost flat on y-o-y basis while the operating margins are likely to
decline 70 bps to 13.9%. Pricing pressure from OEM’s is lilkely to impact the margins.
Higher depreciation cost is likely to lead to a 9% y-o-y drop in adjusted PAT to Rs. 113 crore.
Key Monitorables: 1. New Customer / product additions 2. Status of ABS / CBS related product launches
3. Currency movements

Net Sales 1934.9 1860.4 4.0 1900.4 1.8
EBIDTA 269.2 271.4 (0.8) 356.2 (24.4)
EPS 8.0 8.9 (9.4) 12.8 (37.3)
Gross Margin (%) 42.4 41.4 100 bps 46.7 (430) bps
EBITDA Margin % 13.9 14.6 (70) bps 18.7 (480) bps
JK Tyres: (Consolidated)
Comments
Topline growth is expected to moderate substantially to 3%, reflecting a slowdown in the auto OEM’s. The
replacement segment demand too is likely to be muted..
Operating profits are likely to decline 37% y-o-y while the operating margins are likely to contract 510 bps
y-o-y reflecting the drop in the gross margins.
Tracking the weak operating performance and elevated interest cost due to elevated debt levels, we
expect a loss of Rs 3 crore.
Key monitorables: 1 OEM demand outlook 2. Raw material costs 3. Debt repayment schedules

Net Sales 2512.7 2439.5 3.0 2705.9 (7.1)
EBIDTA 204.9 325.5 (37.0) 261.0 (21.5)
Adjusted PAT -2.9 87.8 (103.3) 36.5 (107.9)
Adjusted EPS -0.1 3.9 (103.3) 1.6 (107.9)
EBITDA Margin % 8.2 13.3 (510) bps 9.6 (140) bps
July 09, 2019 15

Sector Update
Lumax Industries: (Consolidated)
Comments
Topline is expected to decline in double digits by 10%, following a muted demand from auto OEM’s as few
of the customers had resorted to production cuts during the quarter citing weak demand.
Operating profits to decline by 12% y-o-y while the operating margins are likely to contract by 20 bps to
8%. Decline in the topline leading to operating de-leverage is likely to affect margins.
Higher interest cost is likely to lead to a 28% decline in the PAT to Rs. 15 crore.
Key monitorables: 1. Demand outlook for one of the leading Japnese two wheeler customer 2. Cost
pressures on account of shift to BS-VI norms

Net Sales 446.6 496.2 (10.0) 432.7 3.2
EBIDTA 35.7 40.8 (12.4) 30.7 16.2
Adjusted Net Profit 14.4 20.0 (28.2) 14.3 1.0
EPS 15.4 21.4 (28.2) 15.2 1.0
Minda Industries: (Consolidated)

Comments
Revenue is expected to decline marginally by 1% y-o-y due to a slowdown in the demand from the PV and
2w OEM’s.
Operating profits likely to increase 2% y-o-y while operating margins are expected to expand 40 bps y-o-y
to 12.3%.
Higher depreciation and interest expenses are likely to lead to a 6% y-o-y dip in PAT to Rs 66 cr.
Key Monitorables: 1.Outlook of the PV and 2W OEM’s. 2. Commentary on consolidation of subsidiaries
and group companies 3.New customers /product additions

Revenues 1412.1 1429.8 -1.2 1486.5 -5.0
EBITDA 173.3 170.1 1.9 185.4 -6.5
Adjusted Net Profit after MI 65.7 70.1 -6.2 73.5 -10.6
Adjusted EPS 2.5 2.7 -6.2 2.8 -10.6
EBITDA Margins (%) 12.3 11.9 40 bps 12.5 (20) bps
July 09, 2019 16

Sector Update
Escorts
Comments
Revenues are expected to decline sharply by 8% y-o-y aided by a drop of 12% in tractor segment revenues
given a 14% decline in tractor sales volumes.
Operating profits are expected to decline by 17% y-o-y while operating margins are likely to drop 120 bps
y-o-y to 11.1%. The drop in margins is attributable to higher employee costs.
Tracking operating performance, the adjusted PAT is expected to decline by 19% y-o-y to Rs 97 crore.
Key monitorables: Commentary on tractor industry growth 2. Channel inventories 3. Growth outlook for
construction equipment and railway segments

Revenues 1,395.1 1,511.3 -7.7 1,631.7 -14.5
EBIDTA 154.4 185.5 -16.8 189.8 -18.6
Adjusted PAT 97.1 119.6 -18.8 121.4 -20.0
EPS 11.4 14.0 -18.8 14.2 -20.0
Subros
Comments
Revenues are expected to decline by 6% y-o-y attributable to a double digit drop in demand from Maruti
Suzuki, which is a key customer of the company.
Operating profits likely to dip 5% y-o-y while operating margins are expected to expand 10 bps y-o-y to
10.8%.
Adjusted PAT is expected to drop 9% y-o-y to Rs. 20 crore.
Key Monitorables: 1.Demand outlook 2. Radiator Off take by Denso 3.INR-JPY currency movement

Revenues 499.8 531.7 -6.0 518.1 -3.5
EBITDA 53.9 57.0 -5.4 55.0 -1.9
Adjusted PAT 20.3 22.3 -9.0 16.2 25.0
Adjusted EPS 3.38 3.71 -9.0 2.70 25.0
EBITDA Margins (%) 10.8 10.7 10 bps 10.6 20 bps
July 09, 2019 17

Sector Update
GNA Axles
Comments
Topline growth is expected to slow down drastically to 6% y-o-y to Rs. 225 crore on the demand slowdown
in the domestic markets. Exports likely to grow in strong double digits
Operating profits are expected to rise by 18% y-o-y to Rs. 37 crore while margins are likely to improve by
160 bps to 16.5%
PAT is expected to grow 22% y-o-y to Rs 17 cr
Key monitorables: 1. Demand outlook over the next 1-2 quarters 2. Updates on the SUV segment product
launches 3. Cost pressures

Revenues 225.3 212.6 6.0 242.2 -7.0
EBIDTA 37.1 31.6 17.5 38.7 -3.9
Adjusted PAT 17.1 14.0 21.8 17.9 -4.8
EPS 7.9 6.5 21.8 8.3 -4.8
EBIDTA Margins (%) 16.5 14.9 160 bps 16.0 50 bps
Suprajit Engineering (Consolidated)

Comments
Revenue growth is likely to slow down substantially to 2% y-o-y to Rs 369 crore on account of a slowing
demand from across OEMs.
Operating profits are likely to decline steeply by 13% y-o-y to Rs. 49 crore while operating margins are
likely to contract by 220 bps y-o-y to 13.1% primarily due to high raw material costs and high employee
expenses.
Other income is expected to rise sharply by 145% y-o-y leading to a 2% y-o-y growth in PAT to Rs. 29 crore.
Key monitorables: 1 Management commentary on demand outlook and traction in the non auto space.
New client / product addition 2. Margin outlook 3. Updates on new cables capacity

Revenues 369.0 361.7 2.0 431.1 -14.4
EBITDA 48.5 55.4 -12.5 63.5 -23.7
Adjusted PAT 29.3 28.8 1.8 41.7 -29.7
Reported PAT 29.3 28.8 1.8 41.7 -29.7
Adjusted EPS (Rs) 2.1 2.1 1.8 3.0 -29.7
EBITDA Margins (%) 13.1 15.3 (220) bps 14.7 (160) bps
July 09, 2019 18

Sector Update
Lumax Auto Technology: (Consolidated)
Comments
Numbers are not comparable on y-o-y basis due to demerger of the SMT unit.
Topline is expected to decline in double digit by 13% following a muted OEM demand.
Operating profits to decline 27% y-o-y to Rs 24 crore while the operating margins likely to contracted 160
bps to 8.4%. Decline in the topline leading to operating de-leverage is likely to impact the margins.
Adjusted PAT is expected to decline 29% to Rs 13 crore
Key Monitorables: 1. Demand outlook from auto OEM’s 2. Cost pressures on account of regulatory changes
for the auto industry

Total Income 289.7 333.0 -13.0 301.4 -3.9
EBIDTA 24.3 33.4 -27.4 26.1 -7.1
Adjusted PAT 12.9 18.1 -28.6 13.1 -1.8
EPS 1.9 2.7 -28.6 1.9 -1.8
Tata Motors: (Consolidated)

Comments
Topline is expected to decline sharply by 19% y-o-y. JLR revenue as well as the standalone business
revenue is expected to drop by 13% and 21% respectively, led by a steep drop in volumes.
Operating profits are likely to decline by 35% y-o-y, while operating margins are likely to drop by 150 bps
due to 6.1% due to operating de-leverage and high cost pressures.
Tata Motors is expected to report a loss of Rs 1,827 crore, as against a loss of Rs. 1,902 crore
Key monitorables: 1. The management commentary outlook for JLR and standalone business. 2.Channel
inventories 3. Commentary on forex movements.

Revenue 54,005.1 66,701.1 -19.0 86,422.0 -37.5
Operating Profit 3,305.1 5,050.4 -34.6 8,019.3 -58.8
Adj Net Profit (1,827.3) (1,902.4) -3.9 2,224.7 -182.1
Adjusted EPS (Rs) (5.4) (5.6) -3.9 6.6 -182.1
OPM% 6.1% 7.6% (150) bps 9.3% (320) bps
July 09, 2019 19

Sector Update
Bharat Forge
Comments
Revenue growth expected to slow down substantially to 5% y-o-y aided by an equal growth in the shipment
tonnages. The realisation per tonne is likely to be flat y-o-y..
Operating profits likely to increase 3% y-o-y while operating margins expected to drop 60 bps y-o-y to
28.4%. The drop in operating margins is in line with the drop in gross margins.
The adjusted PAT is expected to grow 7% y-o-y to Rs. 250 crore.
Key monitorables: 1.Outlook of the CV and PV OEM’s. 2. Non auto business growth drivers 3. New
products introduced

Net Sales 1,553.6 1,479.7 5.0 1,668.6 (6.9)
Operating profit 441.9 428.6 3.1 484.9 (8.9)
Tax 129.0 120.7 6.9 154.3 (16.4)
Adjusted PAT 250.4 234.5 6.8 267.2 (6.3)
EPS 10.8 10.1 6.8 11.5 (6.3)
Gross Margin (%) 63.2% 63.9% (70) bps 62.7% 50 bps
OPM (%) 28.44 28.97 (60) bps 29.06 (70) bps
Motherson Sumi (Consolidated)

Comments
Topline is expected to grow by 10% y-o-y to Rs 16,269 crore. However, revenues are not comparable on a
y-o-y basis due to past acquisitions.
Operating profit is likely to decline 14% y-o-y while operating margins are expected to dip by 210 bps to
7.5%. Cost pressures across are expected to affect margins.
Adjusted PAT is likely to decline 7% y-o-y to Rs 411 crore.
Key monitorables: 1. Revenue outlook 2. Cost pressures at overseas subsidiaries – SMR and SMP

Net Sales 16269.3 14775.5 10.1 17169.5 (5.2)
EBIDTA 1220.2 1412.1 (13.6) 1242.8 (1.8)
Adjusted Net Profit 410.7 443.1 (7.3) 410.0 0.2
EPS 1.3 1.4 (7.3) 1.3 0.2
Gross margins (%) 42.2 42.4 (20) bps 41.9 30 bps
July 09, 2019 20

Sector Update
Alicon Castalloy (Consolidated)
Comments
The topline is expected to decline by 5% following a muted demand from auto OEM’s as few of the
companies had undertaken production cuts during the quarter.
Operating profits are likely to grow 4% y-o-y to Rs 34 crore while the operating margins likely to expand
110 bps to 12%.
Due to the expected higher interest charges the adjusted PAT is expected to decline 8% to Rs 8 cr
Key Monitorables: 1. Demand outlook from auto OEM’s 2. Topline and margins guidance

Net Sales 281.9 296.7 (5.0) 313.4 (10.1)
EBIDTA 33.8 32.5 4.1 37.1 (8.8)
EPS 8.3 9.0 (8.4) 11.7 (29.1)
EBITDA Margin % 12.0 10.9 110 bps 11.8 20 bps
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.
July 09, 2019 21

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India - Sector Update - Automobiles

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Sector Update

The performance of Sharekhan’s automobile universe (ex-Tata

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Rico Auto: (Consolidated)

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Minda Industries: (Consolidated)

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Suprajit Engineering (Consolidated)

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Tata Motors: (Consolidated)

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

Motherson Sumi (Consolidated)

Quarter ended Rs. cr.

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Quarter ended Rs. cr.

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