November Auto Sales Analysis: Angel Broking

Views of Mr. Shrikant Akolkar (Research Analyst- Auto, Angel Broking):

Maruti Suzuki in line with expectations

Maruti Suzuki reported total 14.1% growth in its total vehicles. Domestic PV volumes grew by 14.3% yoy while exports grew by 0.8% yoy. Its LCV, Super Carry has also reported more than 1,000 volumes for the second month in row. The utility vehicle volumes grew by 34%, fastest in the last four months. While entry level, Mini segment reported 1.8% yoy drop in the volumes, compact range vehicles reported 32.4% yoy growth fuelled by Baleno and Ignis. Maruti has also launched CelerioX, a facelift of old Celerio which includes AGS technology. Newly launched Dzire continues to see about 2-3 months of waiting period and company is also expected to launch new Swift hatchback in January-2018 which is also likely to see good response. Overall, the numbers are along our expectations and we believe that with the robust order book and new launches, company is expected to report healthy volume growth going ahead. We have an accumulate rating on the stock with price target of Rs 9,495.

Bajaj Auto - Exports continue to shine, 3Ws put a robust shown

Aided by strong show in the 3Ws, Bajaj auto has reported 20.9% yoy growth in the November volumes. The domestic 2W sales were flat on yoy basis as company sold over 2 lakh vehicles in the earlier three months. Also with the scooterization continued, motorbikes have continued to lose market share in the 2W space to the scooters. Domestic scooter volumes grew by 157% yoy to 37887 units. This was helped by lower base created by demonetization in November-2016 and better monsoon. Company also anticipates demand of ~60,000 3W units for next few months hence we believe that 3W numbers should be good going ahead. On the exports front, company has done with 24.5% yoy growth in 2W exports and 41.1% growth in 3W exports. Expansion in the new countries has clearly helped the company to report good set of numbers on the exports front. We have an accumulate rating on the stock with price target of Rs 3,395.

Ashok Leyland shows strong growth in CV numbers

Ashok Leyland's November volumes have surprised positively. With total volumes growing by 51% yoy, November has signed that volume growth will remain solid going ahead. MHCV volumes were up 54% yoy while LCV volumes were up 44%. The recovery in the industries and public capex is expected to boost the CV volumes further and we believe, Ashok Leyland, due to its pure play CV business is expected to gain market share. We have a buy rating on the stock with price target Rs 139.

Source : Equity Bulls

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