India Automobiles - Local market steps on gas - Elara Capital

Hero Honda

Hero Honda (HH) has finally managed to overcome its supply issues (last month it faced a shortage of batteries from Exide) to post strong sales of 436,000 units. The highlight was the robust sale of its scooter brand, Pleasure, which posted a 65% YoY increase in sales at 25,000 plus units. We expect the company to clock this monthly run-rate on a consistent basis.

Maruti Suzuki

Maruti Suzuki (MSIL) has finally managed to de-bottleneck some of its production constraints and resultantly managed to cross more than 100,000 in sales for the first time in its history. With a strong demand pipeline, we expect the company's average monthly run-rate to be consistent at around 100,000 plus levels. Newly launched Eeco, Dzire petrol and Swift diesel continue to be the models in (huge) demand.

Bajaj Auto

Bajaj Auto's (BJAUT) domestic two wheeler sales - adjusted for exports - were up ~7% YoY at 191,000 units. The sequential improvement was helped by a good performance from the recently launched Pulsar 135 and Discover 150 models. The company management has maintained that the numbers were understated due to production constraints with few key suppliers hence guides that June'10 sales would make up for this by posting total sales of 330,000 units as against 300,000 units in the current month.

Tata Motors

M&HCV sales of Tata Motors (TTMT), up 5% QoQ, were in-line with expectations as our channel checks had suggested early purchases by various fleet operators to avoid the inflation in truck costs post the change in emission norms from October'10. We expect healthy truck sales in H1FY10 on account of a better industrial output plus pre-buying to get around changes in emission norms hence H2FY10 is likely to be relatively subdued. Thus taking a cue from TTMT sales, we expect Ashok Leyland domestic M&HCV sales to be 6,300 units. LCVs and PCs posted decent sales though UVs continue to post sluggish sales.

Source : Equity Bulls

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