Volume recovery across segments; first quarter post regulatory hiccups
Regulatory actions (demonetization, emission norm changes and pre-GST destocking) had materially influenced auto volumes since 3QFY17. However, given the waning regulatory impact, the automobile sector has witnessed gradual volume growth August onward. This was partly led by pre-festive inventory filling and positive rural sentiment in key markets. Our channel checks suggest above-average volume growth in key rural markets during this festive season.
Amara Raja Batteries
We are reducing EPS estimates of FY18E/FY19E by 9.4%/13.2% as we factor in lead price inflation. The stock trades at 27.7x FY18E and 21.5x FY19E EPS; Maintain Buy.
We revise EPS estimates of FY18E/FY19E by 3%/0.8% led by better operating performance. The stock trades at EV/EBITDA of 12.7x FY18E and 9.8x FY19E EBITDA. Maintain Buy.
The stock trades at 21.7x FY18E and 18x FY19E EPS; maintain Buy.
The stock trades at 34.6x FY18E and 24.8x FY19E EPS; maintain
The stock trades at 38.4x FY18E and 29.7x FY19E EPS; maintain Neutral.
We expect adjusted PAT to decline 14% YoY to INR921m. Buy.
The stock trades at 37.2x FY18E and 27.5x FY19E EPS. Maintain Buy.
The stock trades at 35.6x FY18E EPS and 26.9x FY19 EPS. Maintain Buy.
PAT should increase 91% to INR657m, as against INR343m in 2QFY17. Neutral.
The stock trades at 22.8x FY18E and 15.4x FY19E EPS, and maintain Buy.
We have cut our FY18E/FY19E EPS estimates by 2.3%/1%. The stock trades at 20.3 FY18E and 19.1 FY19E EPS; maintain Neutral.
Mahindra & Mahindra
The stock trades at 19.9x FY18E and 16.9x FY19E EPS; Maintain Buy.
The stock trades at 27.5x FY18E and 20.5x FY19E EPS. Maintain Buy.
The stock trades at 21.1x FY18E and 6.9x FY19E EPS. Buy.
TVS Motor Company
The stock trades at 43.4x FY18E and 26.7x FY19E EPS; Maintain Buy.