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Dashboard
The Monthly Auto Update
Comparative Valuation
CMP * Rating P/E (x) EV/EBITDA (x) RoE (%) RoCE (%)
(INR) FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E
Ba ja j Auto 1,784 Buy 16.6 18.0 14.3 12.1 12.5 9.6 56.7 43.3 44.5 73.0 60.0 61.2
Hero MotoCorp 1,850 Buy 15.5 17.1 14.9 10.0 10.4 8.5 55.4 41.8 39.7 52.4 45.7 50.4
M&M 870 Buy 17.0 13.6 11.1 10.5 8.5 7.6 23.0 21.7 19.3 23.1 24.3 22.7
Ma ruti Suzuki 1,364 Buy 23.5 20.3 14.4 12.7 9.2 6.4 10.8 10.5 13.2 13.2 12.4 15.9
Ta ta Motors 273 Buy 12.3 19.5 14.0 4.5 3.8 3.2 38.4 25.2 24.7 24.1 23.9 24.2
* Pri ce a s on 3 October 2012 Source: Compa ny/MOSL
560,000
495,000
430,000
365,000
300,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
October 2012 3
Dashboard
October 2012 4
Dashboard
245,000
180,000
Ap r Ma y Jun Ju l Aug Sep Oct Nov Dec Jan Feb Mar
45,000
24,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Ja n Fe b Mar
160,000
Exports are impacted by
custom duty hike in 120,000
Sri Lanka
80,000
40,000
Ap r May Ju n Jul Aug Sep Oct No v De c Ja n Fe b Ma r
Market mix
Domestic Exports
100%
75%
50%
Market mix
remains stable 25%
0%
May-08
Nov-08
Mar-09
May-09
Nov-09
Mar-10
May-10
Nov-10
Mar-11
May-11
Nov-11
Mar-12
May-12
Jul-08
Sep-08
Jan-09
Jul-09
Sep-09
Jan-10
Jul-10
Sep-10
Jan-11
Jul-11
Sep-11
Jan-12
Jul-12
Sep-12
Source: Company/MOSL
October 2012 5
Dashboard
October 2012 6
Dashboard
140,000
FY11 FY12 FY13
115,000
40,000
Apr May Jun Jul Aug Se p Oct Nov Dec Ja n Fe b Ma r
15,000
Export de-grew
by 23% YoY 10,000
5,000
0
Apr May Jun Jul Aug Sep Oct Nov Dec Ja n Fe b Mar
A1 A2 A3 + A4 MPVs + UVs
100%
75%
A2 & A3 segments
50%
dominate the
segment mix; UVs 25%
contribution rising
0%
May-08
Nov-08
Mar-09
May-09
Nov-09
Mar-10
May-10
Nov-10
Mar-11
May-11
Nov-11
Mar-12
May-12
Jul-08
Sep-08
Jan-09
Jul-09
Sep-09
Jan-10
Jul-10
Sep-10
Jan-11
Jul-11
Sep-11
Jan-12
Jul-12
Sep-12
Market mix
Domes ti c Sa l es Exports
100%
75%
Export contribution to
50%
volumes fell
to ~11% in FY12 from 25%
14.5% in FY10
0%
May-08
Nov-08
Mar-09
May-09
Nov-09
Mar-10
May-10
Nov-10
Mar-11
May-11
Nov-11
Mar-12
May-12
Jul-08
Sep-08
Jan-09
Jul-09
Sep-09
Jan-10
Jul-10
Sep-10
Jan-11
Jul-11
Sep-11
Jan-12
Jul-12
Sep-12
Source: Company/MOSL
October 2012 7
Dashboard
Mahindra and Mahindra: Financial & Valuation Summary
Bl oomberg MM IN Year Net Sales S/A PAT * S/A EPS * Cons. Con. EPS P/E Cons. RoE RoCE EV/ EV/
Equi ty Sha res (m) 587.2 End (INR m) (INR m) (INR) EPS (INR) Gr (%) (x) P/E (x) (%) (%) Sales (x) EBITDA
CMP (INR) 870 3/11A 234,603 25,732 43.0 48.0 18.1 ‐ ‐ 25.0 26.8 ‐ ‐
52-Wk Ra nge (INR) 875/622 3/12A 318,535 28,888 48.3 51.2 6.6 18.0 17.0 23.0 23.1 1.6 13.6
1,6,12 Rel.Perf.(%) -2/6/5 3/13E 393,584 33,149 55.4 63.7 24.4 15.7 13.6 21.7 24.3 1.3 11.1
M.Ca p. (USD b) 10.0 3/14E 443,341 36,511 61.0 78.4 22.9 14.3 11.1 19.3 22.7 1.2 10.4
* S/A i ncl udi ng MVML
October 2012 8
Dashboard
39,000
UV volumes continue
to remain strong
30,000
21,000
12,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Jan Feb Ma r
28,000
Tractor volumes
de-grew 19% YoY 20,000
12,000
4,000
Apr Ma y Jun Jul Aug Se p Oct Nov Dec Jan Fe b Mar
Product mix
Nov-08
Mar-09
May-09
Nov-09
Mar-10
May-10
Nov-10
Mar-11
May-11
Nov-11
Mar-12
May-12
Jul-08
Sep-08
Jan-09
Jul-09
Sep-09
Jan-10
Jul-10
Sep-10
Jan-11
Jul-11
Sep-11
Jan-12
Jul-12
Sep-12
Source: Company/MOSL
October 2012 9
Dashboard
Highlights
M&HCV volume n Total September-12 volumes de-grew 4% YoY (+5.5% MoM) to 75,773 units (v/s est
continues to be under 77,000). While domestic CVs grew by 5.3% YoY (+7.8% MoM) led by continued
pressure, with no major strong momentum in LCV sales, the domestic PVs declined by 17.7% YoY (-3%
seasonal improvement MoM). Based on our volume growth estimate of 3.3% for FY13, implied residual
MoM. run-rate is ~87,803 units (3.9% residual growth).
n Domestic CV volumes grew 5.3% YoY (7.8% MoM) to 48,680 (v/s est 48,350) led by
strong LCV growth of 18.9% YoY (+9.6% MoM) to 33,393 (v/s est 31,750). However,
M&HCV volume continues to be under pressure, with de-growth of 15.8% YoY
(+4.1% MoM) to 15,287 (v/s est 16,600), with no major seasonal improvement
MoM. Our FY13 estimates factor in volume growth of 4.8% for CVs (incl exports)
with M&HCV volume decline of 11.7% and ~14.9% growth in LCVs.
n Domestic passenger cars de-grew by 18.5% YoY (-3.4% MoM) to 17,133 (v/s est
17,833), driven by 87% YoY (-15.6% MoM) growth in Nano volumes. Nano volumes
came at 5,491 (v/s 6,507 in Jul-12). Ex Nano, domestic car volumes de-grew 35.6%
YoY (+3.8% MoM) impacted by 23%/52% YoY decline in Indica/Indigo volumes
respectively. We factor in a drop of 1.5% in passenger cars volumes in FY13.
n Domestic UV volumes de-grew 14.9% YoY (-1.4% MoM) at 4,519 (v/s est 4,610). Our
FY13 estimate assumes volume growth of 10%.
n We factor in overall volume growth of 3.3% in FY13. FY13 JLR volumes are estimated
at ~362,500 (+15%).
n The ordinary/DVR stock is currently trading at 8.3x/5x FY13E and 6.6x/4x FY14E
consolidated EPS. Maintain Buy with target price of INR370/INR223 for ordinary/
DVR shares.
October 2012 10
Dashboard
10,000
4,000
Apr May Jun Jul Aug Sep Oct Nov Dec Ja n Fe b Mar
40,000
LCV volumes 32,000
remains robust
24,000
16,000
8,000
Apr May Jun Jul Aug Se p Oct Nov De c Ja n Fe b Mar
32,000
Domestic car volumes
grew 18% YoY 26,000
20,000
14,000
8,000
Apr Ma y Jun Jul Aug Sep Oct Nov De c Ja n Feb Ma r
Product mix in the CV segment
M&HCVs LCVs
100%
75%
LCVs account for ~70% of
50%
the CV product portfolio
25%
0%
May-08
Nov-08
Mar-09
May-09
Nov-09
Mar-10
May-10
Nov-10
Mar-11
May-11
Nov-11
Mar-12
May-12
Jul-08
Sep-08
Jan-09
Jul-09
Sep-09
Jan-10
Jul-10
Sep-10
Jan-11
Jul-11
Sep-11
Jan-12
Jul-12
Sep-12
Source: Company/MOSL
October 2012 11
Dashboard
86,000
Motorcycle volumes
decline 74,000
62,000
50,000
Apr Ma y Jun Jul Aug Se p Oct Nov De c Ja n Fe b Mar
114,000
under pressure
78,000
60,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Jan Fe b Mar
Sales mix
75%
Scooters and
mopeds have been the 50%
key volume driver
25%
0%
May-08
Nov-08
Mar-09
May-09
Nov-09
Mar-10
May-10
Nov-10
Mar-11
May-11
Nov-11
Mar-12
May-12
Jul-08
Jan-09
Jan-11
Jan-12
Sep-08
Jul-09
Jan-10
Sep-09
Jul-10
Sep-10
Jul-11
Sep-11
Jul-12
Sep-12
Source: Company/MOSL
October 2012 12
Dashboard
Retail sales under pressure for HMSI as well, despite reporting strong
wholesale volume growth
n While HMSI continues to report healthy volume growth, our channel check suggests
weak demand and inventory pile-up with dealers.
n The strong growth in wholesale volumes is largely a reflection of network
expansion (currently ~600 dealers v/s ~450 last year) and inventory pile-up with
dealers (around 30 days).
n HMSI’s volume growth is expected to moderate on the back of weak demand,
high channel inventory and capacity expansion (2nd plant) is in the base.
Growth rate to moderate with weak retail demand, high channel inventory & as capacity expansion is in the base
October 2012 14
Dashboard
Share of sales from the Southern market is higher than Industry average for Japanese players
Valuation & view: Bajaj Auto better placed than Hero MotoCorp
n After 3 years of strong volume growth, domestic two-wheeler volumes are
witnessing some pressure over last 6 months. This coupled with increased
competitive intensity could put pressure on market share and profitability for
incumbents.
n We believe recovery in demand in upcoming festive season would be very critical
to maintain profitability.
n We believe Bajaj Auto is better placed vis-à-vis Hero MotoCorp due to its
diversified product/market mix and would be less impacted to any increase in
competitive intensity.
October 2012 15
Dashboard
October 2012 16
Dashboard
October 2012 17
Dashboard
October 2012 18
Dashboard
1,400,000
600,000
400,000
Oct
May
Nov
Apr
Mar
Aug
Jun
Sep
Jan
Feb
Dec
Jul
Increasing competition in
2-wheeler segment,
with HMSI consistently
gaining market share
October 2012 19
Dashboard
1,000,000
400,000
Oct
May
Nov
Apr
Mar
Aug
Jun
Sep
Jan
Feb
Dec
Jul
Motorcycles: domestic market share
100%
Hero MotoCrop
continues to dominate 75%
motorcycle segment, 50%
although HMSI's
25%
increasing its
market share 0%
Oct-08
Oct-09
Oct-10
Oct-11
Aug-08
Aug-09
Aug-10
Aug-11
Aug-12
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Jun-08
Dec-08
Feb-09
Jun-09
Dec-09
Feb-10
Jun-10
Dec-10
Feb-11
Jun-11
Dec-11
Feb-12
Jun-12
Two-wheelers: Product mix
75%
0%
Oct-08
Oct-09
Oct-10
Oct-11
Apr-08
Aug-08
Apr-09
Aug-09
Apr-10
Aug-10
Apr-11
Aug-11
Apr-12
Aug-12
Jun-08
Dec-08
Feb-09
Jun-09
Dec-09
Feb-10
Jun-10
Dec-10
Feb-11
Jun-11
Dec-11
Feb-12
Jun-12
175,000
Export volumes
also remain under 150,000
pressure
125,000
100,000
Oct
May
Nov
Apr
Mar
Aug
Jun
Sep
Jan
Feb
Dec
Jul
October 2012 20
Dashboard
80,000
3W volumes impacted
68,000
due to lower exports
56,000
44,000
32,000
Apr Ma y Jun Jul Aug Se p Oct Nov De c Jan Feb Ma r
Pas s e nge r Go od s
100%
75%
Passenger segment
50%
dominates three-
wheelers with over 80%
25%
contribution
0%
Oct-08
Oct-09
Oct-10
Oct-11
Apr-08
Aug-08
Apr-09
Aug-09
Apr-10
Aug-10
Apr-11
Aug-11
Apr-12
Aug-12
Jun-08
Dec-08
Feb-09
Jun-09
Dec-09
Feb-10
Jun-10
Dec-10
Feb-11
Jun-11
Dec-11
Feb-12
Jun-12
October 2012 21
Dashboard
75%
Bajaj Auto continues to
dominate passenger
50%
segment…
25%
0%
Oct‐10
Oct‐11
Oct‐08
Oct‐09
Apr‐12
Aug‐12
Apr‐10
Apr‐11
Aug‐10
Aug‐11
Apr‐08
Apr‐09
Aug‐08
Aug‐09
Dec‐11
Feb‐12
Jun‐12
Dec‐09
Feb‐10
Jun‐10
Dec‐10
Feb‐11
Jun‐11
Jun‐08
Dec‐08
Feb‐09
Jun‐09
Three wheelers: goods segment market share
October 2012 22
Dashboard
200,000
Volumes remain
160,000
sluggish
120,000
80,000
Apr May Ju n Ju l Aug Sep Oct Nov Dec Ja n Feb Mar
64,000
Volumes improve
led by Ertiga, Duster and 52,000
Quanto
40,000
28,000
16,000
Apr May Jun Jul Au g Se p Oct No v Dec Jan Feb Ma r
October 2012 23
Dashboard
56,000
47,000
Export volumes
pick-up 38,000
29,000
20,000
Apr Ma y Jun Jul Aug Se p Oct Nov De c Ja n Feb Ma r
75%
Maruti's market share
impacted by Manesar 50%
lock-out
25%
0%
Oct‐10
Oct‐11
Oct‐08
Oct‐09
Apr‐11
Aug‐11
Apr‐12
Aug‐12
Apr‐08
Aug‐08
Apr‐09
Aug‐09
Apr‐10
Aug‐10
Feb‐11
Dec‐11
Feb‐12
Jun‐12
Jun‐08
Dec‐08
Feb‐09
Jun‐09
Dec‐09
Feb‐10
Jun‐10
Dec‐10
Jun‐11
UVs: domestic market share
A2 dominates the
passenger vehicles
segment
October 2012 24
Dashboard
32,000
M&HCV volumes
remains muted 24,000
16,000
8,000
0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Fe b Ma r
6,000
4,500
3,000
1,500
0
Apr Ma y Jun Jul Aug Se p Oct Nov Dec Jan Fe b Mar
October 2012 25
Dashboard
Ta ta M oto r As ho k Le yl a n d Ei ch e r
100%
75%
0%
Oct-08
Oct-09
Oct-10
Oct-11
Apr-08
Aug-08
Apr-09
Aug-09
Apr-10
Aug-10
Apr-11
Aug-11
Apr-12
Aug-12
Jun-08
Dec-08
Feb-09
Jun-09
Dec-09
Feb-10
Jun-10
Dec-10
Feb-11
Jun-11
Dec-11
Feb-12
Jun-12
M&HCVs: domestic market share, buses (%)
75%
50%
25%
0%
Oct-08
Oct-09
Oct-10
Oct-11
Apr-08
Aug-08
Apr-09
Aug-09
Apr-10
Aug-10
Apr-11
Aug-11
Apr-12
Aug-12
Jun-08
Dec-08
Feb-09
Jun-09
Dec-09
Feb-10
Jun-10
Dec-10
Feb-11
Jun-11
Dec-11
Feb-12
Jun-12
LCVs: domestic volumes (units)
50,000
40,000
LCVs continue
robust growth 30,000
20,000
10,000
0
Apr May Jun Jul Aug Sep Oct Nov De c Ja n Fe b Mar
October 2012 26
October 2012
to CVs increased
Tata Motors dominates
LCVs contribution
the domestic LCV
segment
0%
25%
50%
75%
100%
0%
25%
50%
75%
100%
Apr-08
Jun-08 Apr-08
Aug-08 Jun-08
Oct-08 Aug-08
Dec-08 Oct-08
Feb-09 Dec-08
Feb-09
Apr-09
Apr-09
Jun-09
LCVs: domestic market share (%)
Jun-09
Goods: segment-wise break-up (%)
Aug-09
LCVs
Aug-09
TataMotor
Oct-09
Oct-09
Dec-09 Dec-09
Feb-10 Feb-10
<12T
Apr-10 Apr-10
Pi aggi o
Jun-10 Jun-10
Aug-10 Aug-10
<16T
Oct-10 Oct-10
Dec-10
M&M
Dec-10
Feb-11 Feb-11
<35T
Apr-11 Apr-11
Jun-11 Jun-11
Others
Aug-11 Aug-11
Oct-11
Oct-11
Dec-11
Dec-11
Feb-12
Feb-12
Apr-12
Apr-12
Jun-12
Jun-12
Aug-12
27
Aug-12
Dashboard
Dashboard
BharatBenz HCV truck BharatBenz starts commercial sales of its heavy duty trucks in India
Daimler India Commercial Vehicles (DICV), the 100% Indian subsidiary of Daimler AG,
launched three heavy duty trucks under the BharatBenz brand. The three trucks
launched, are the first in a range of 17 models that Bharat Benz plans to launch over
the next 17 month. Speaking on the occasion, Marc Llistosella, Managing Director and
CEO, DICV said: “Today is an important milestone for all of us at Daimler and Indian
trucking. From today, Indian truck buyers will have a new choice. A choice, for trucks
that are more fuel efficient, more reliable and in the end makes them more successful.
BharatBenz is here, and we are proud to have delivered on the promise we made
since 2010 - to launch our trucks in September 2012. We will drive the change in the
Indian market with a whole new product, sales and service experience for our
customers.”
October 2012 28
Dashboard
Yamaha launches Ray scooter, eyes 1m and 2.8m units in India by 2014 &
2018 respectively
Yamaha launches Ray scooter Yamaha entered the Indian scooter market with the launch of its new scooter Ray
priced at INR46,000 (ex-showroom Delhi). It is an automatic scooter powered by a
new 113cc engine that makes 7.1PS at 7500rpm and 8.1Nm of torque. The company
claims a 0-60kmph time of 12s and a fuel efficiency of 62.1kmpl. It was also reported
that Hiroyuki Suzuki, Chief Executive & MD at India Yamaha Motors said the company
plans to sell 0.65m units by next year from current 0.4m units. Yamaha is targeting 20%
share in the scooter segment by 2016, he added. It was also mentioned that Yamaha
has started exporting bikes to few Latin American countries and may increase export
volumes in coming years. By 2014, Yamaha aims to sell 1m units and subsequently
touch 2.8m by 2018. The company’s proposed Chennai manufacturing plant will be
operational by 2014 and total production capacity will touch 2.8m by 2018, according
to the reports.
October 2012 30
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