Our top picks in OEMs space are MSIL (extensive distribution network and strong rural franchise), Ashok Leyland (leadership in high tonnage trucks) and Baja Auto (diversified product and geographical mix). Automobiles sector will report weak number in 3Q led by increase in cost of ownership (higher fuel prices, insurance and financing costs) and higher inventory at dealers level. Channel inventory for 2Ws and PVs remained elevated at 6-8 weeks, forced OEMs to offer aggressive incentives to clear inventories. 2Ws/CVs segment posted 9/5% volume growth YoY while PVs volume declined 1% YoY. In CV segment M&HCV; volume fell by 12% YoY, offset by 17% growth in LCV segment. Auto OEM universe is expected to post 2% YoY revenue growth however, EBITDA could contract 11% YoY.