Momentum Continues…
Auto Sales maintained a robust momentum in March 2010 as well and touched record highs. This was on the back of positive consumer sentiment and advanced buying at the dealer's desk (in anticipation of a price hike, due to the change in emission norms from April 1, 2010). Sales volume of most players showed no signs of tapering off, and recorded healthy growth for the month. The Commercial Vehicle (CV) segment dominated the overall growth in March 2010, led by the Medium & Heavy Commercial Vehicle (M&HCV) segment, as the domestic recovery was affirmed by the overall pick up in economic and industrial activities. The Passenger Vehicle (PV) segment also continued on the growth path, following new launches and thanks to a confident consumer in the market. The Two-Wheeler segment also maintained its growth momentum. Going ahead, we expect the demand to be strong, albeit normalized across segments, after considering that growth may have peaked in the past few months, due to the expected price increase after a spurt in raw material prices.
Maruti Suzuki (Maruti) recorded a good 11% yoy growth at 95,123 vehicles (85,669). The March 2010 numbers include domestic sales of 79,530 units and the highest-ever monthly exports of 15,593 units. The management is positive about its new launch, Eeco, which gave a boost to its C segment volumes and grew by 80.6% yoy. Overall, cars grew by 8.8% yoy, while MUVs fell by 51.4% yoy.
Mahindra & Mahindra (M&M) reported overall volumes at 48,012 vehicles (36,675), led by a 54.4% yoy growth in the Tractor segment, and supplemented by a 21.5% yoy growth in the Automotive division. The Automotive segment growth was led by growth in the LCV and three-wheeler segments at 23.1% and 90.3% yoy, respectively. However, on the high base of last year, UV volume growth was muted at 4.7% yoy in the month of March. The company performed exceptionally on the exports side, growing at around 280.5% yoy, on an overall basis.
Tata Motors (TML) reported a robust 39% yoy growth in total volumes, with the M&HCV segment leading the growth at 68.4% yoy, followed by the LCV segment growing at 53.7% yoy. Exports also boosted the company's performance and grew by 128.2% yoy, partially on account of a lower base from the downturn in FY2009. Passenger cars also displayed a healthy growth of 19.8% yoy.
Ashok Leyland (ALL) reported a robust 96.9% yoy growth in total volumes, led by sales in the Trucks segment, which grew at 509.6% yoy, primarily due to a low base effect, coupled with a recovery in domestic industrial production.
Hero Honda (HH) reported a strong growth in the two-wheeler pack, with a 17.3% yoy growth to 4.6mn units, surpassing the management's expectations of ending FY2010 with an estimated sale of 4.5mn units. Bajaj Auto (BAL) led the pack, with a striking 78% growth on the back of its key brands, Pulsar and Discover, performing well in the month. TVS Motor (TVS) clocked a 20.3% yoy growth, due to good growth registered by its Scooter and Moped Segments. The recently launched TVS Jive (launched in Tamil Nadu) and the TVS Wego supported the high volumes in the Motorbike and Scooter segments.
Tuesday, April 6, 2010
Monday, April 5, 2010
Weekly Review---April 6, 2010
Markets continue to consolidate
The Indian stock markets continued to consolidate their gains during the current week of trade as well, with both the benchmark indices, the BSE Sensex and the NSE Nifty, ending higher by a mere 0.3% and 0.2%, respectively. The BSE Mid- and Small-cap indices, however, out-performed their large cap counterparts, with both the indices gaining 3.3% and 1.5%, respectively. Notably, volatility was high, with the key benchmark indices even hitting their highest level in more than two years during the week. On the sectoral front, most of the indices mirrored the mixed trend, with the BSE Realty index gaining the maximum of 3.3%, followed by the BSE Metal index; however, the BSE IT index ended in the negative territory, losing 2.9%.
BSE Realty Index - Bottom Fishing
The BSE Realty Index was the highest gainer for the week, up by 3.3%, and outperforming the benchmark Sensex, which was almost flat with minor gains of 0.3%. The top gainers in the real estate space were DLF (+5.8%), Unitech (+5.2%), Omaxe (+4.2%), Peninsula Land (+3.9%) and Sobha Developers (+3.3%), while the top losers were Akruti City (-2.2%) and Ansal Props (-1.4%). The strong performance by the sector is attributed to value buying by investors after a prolonged relative underperformance vis-à-vis the Sensex. Moreover, we expect to witness a strong sales momentum in 4QFY2010 for DLF and Unitech.
BGR Energy (BGR) - Initiating Coverage
BGR has taken several 'bigger' leaps over the years, from being a mere manufacturer of a few BoP (Balance of Plant) components to executing Turnkey BoP projects, and now gradually executing full-fledged EPC contracts. The company has a healthy order book of Rs11,609cr (4.2x FY2010E sales), providing good revenue visibility. At the current price of Rs505, the stock is quoting at 14.9x and at 11.0x its FY2011E and FY2012E EPS, respectively, which we believe is attractive. We Initiate Coverage with a Buy recommendation and a Target Price of Rs641.
Piramal Life Sciences - Visit Note
Piramal Life Sciences is the de-merged R&D outfit of Piramal Healthcare. The company embarked on the basic R&D activity in 1998 consequent to the acquisition of Hoechst India’s R&D Center. With manpower of around 350 scientists, the company has developed good depth and breadth of pipeline. However, on the valuation front, at current levels, the company is trading at 3.5x its Expenses (FY2009), which is at a significant discount to its peer, SPARC, which trades at 46x its Expenses (FY2009). The stock is Not Rated.
The Indian stock markets continued to consolidate their gains during the current week of trade as well, with both the benchmark indices, the BSE Sensex and the NSE Nifty, ending higher by a mere 0.3% and 0.2%, respectively. The BSE Mid- and Small-cap indices, however, out-performed their large cap counterparts, with both the indices gaining 3.3% and 1.5%, respectively. Notably, volatility was high, with the key benchmark indices even hitting their highest level in more than two years during the week. On the sectoral front, most of the indices mirrored the mixed trend, with the BSE Realty index gaining the maximum of 3.3%, followed by the BSE Metal index; however, the BSE IT index ended in the negative territory, losing 2.9%.
BSE Realty Index - Bottom Fishing
The BSE Realty Index was the highest gainer for the week, up by 3.3%, and outperforming the benchmark Sensex, which was almost flat with minor gains of 0.3%. The top gainers in the real estate space were DLF (+5.8%), Unitech (+5.2%), Omaxe (+4.2%), Peninsula Land (+3.9%) and Sobha Developers (+3.3%), while the top losers were Akruti City (-2.2%) and Ansal Props (-1.4%). The strong performance by the sector is attributed to value buying by investors after a prolonged relative underperformance vis-à-vis the Sensex. Moreover, we expect to witness a strong sales momentum in 4QFY2010 for DLF and Unitech.
BGR Energy (BGR) - Initiating Coverage
BGR has taken several 'bigger' leaps over the years, from being a mere manufacturer of a few BoP (Balance of Plant) components to executing Turnkey BoP projects, and now gradually executing full-fledged EPC contracts. The company has a healthy order book of Rs11,609cr (4.2x FY2010E sales), providing good revenue visibility. At the current price of Rs505, the stock is quoting at 14.9x and at 11.0x its FY2011E and FY2012E EPS, respectively, which we believe is attractive. We Initiate Coverage with a Buy recommendation and a Target Price of Rs641.
Piramal Life Sciences - Visit Note
Piramal Life Sciences is the de-merged R&D outfit of Piramal Healthcare. The company embarked on the basic R&D activity in 1998 consequent to the acquisition of Hoechst India’s R&D Center. With manpower of around 350 scientists, the company has developed good depth and breadth of pipeline. However, on the valuation front, at current levels, the company is trading at 3.5x its Expenses (FY2009), which is at a significant discount to its peer, SPARC, which trades at 46x its Expenses (FY2009). The stock is Not Rated.
Subscribe to:
Comments (Atom)