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Published on 3/11/2018 4:25:21 PM | Source: Motilal Oswal Securities Ltd

Automobiles Sector Update - Motilal Oswal

Mahindra & Mahindra

Tractor wholesales in line at 47.4k units

Domestic volume up 17% YoY, exports up 2% YoY

*  MMs tractor volumes were in line at 47.4k units, showing a growth of 17.7% YoY.

*  Domestic tractor volume grew 17% YoY at 39.5k units while exports volume grew 2% YoY to 1k units.

*  Commenting on the month’s performance, Rajesh Jejurikar, President –FES, M&M said, “We have sold 46,312 tractors in the domestic market during Oct’18, a growth of 17% over last year. Demand gained momentum with the onset of the festival season. In the exports market, we sold 1,064 tractors in Oct’18, a growth of 2% over last year. All our plants operated at full capacity, to help us meet the festive demand.”

*  The stock trades at 17.7x/15.4x FY19E/20E. Maintain Buy.


Bajaj Auto

Above estimates at 506.7k units (est. 479k units)

Domestic volumes up 29% YoY, Exports grow 38% YoY

*  BJAUT’s Oct’18 sales increased 32.5% YoY to 506.7k units, above our estimate of 479k units.

*  Domestic volumes grew 29.4% YoY at 319.9k units (est. 295k units) and exports grew 38.1% YoY at 186.8k units (est. 184k units).

*  Overall motorcycle volumes increased 32.9% YoY. Domestic motorcycle dispatches grew 33.1% YoY to 281.6k units. Motorcycle exports grew 32.5% YoY to 151.4k units.

*  3W volumes remained strong, with overall growth of 32.9% YoY.

*  Domestic 3W volumes maintained the positive momentum, growing 7.6% YoY to 38.4k units. 3W exports grew 68.1% YoY to 35.k units.

*  The stock trades at 16.1x/13.7x FY19E/20E consol. EPS. Maintain Buy.


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