Sell

M&M registered a strong Q3, on expected lines, with ~20%/21% revenue growth in the auto/farm segments, respectively. M&M logged auto volume growth of 16% YoY to 245K units, wherein it saw 20%/7% YoY growth in SUVs/LCVs to 142K/67.5K units, respectively.

We attended M&M’s unveiling of its first two born EV SUVs—BE 6e and XEV 9e, and are impressed by the strong specifications/features and competitive pricing (introductory prices ~6% and 22%, respectively, below those of current top-selling models in the targeted ICE-SUV segments).

Hyundai Motor India (HMIL) logged a soft quarter, with revenue/EBITDA down 8%/10% YoY, respectively; EBITDA margin declined by 70bps QoQ to 12.8%on lower volumes and higher discounts.

We initiate coverage on Hyundai Motor India (HMIL) with REDUCE (TP of Rs1,750, at ~23x core Sep-26E PER, similar to MSIL) amid a lackluster ~5% EPS CAGR over FY24-27E. HMIL has established a strong franchise in India.

TTMT’s Q4 results were muted with limited margin expansion across businesses
despite higher volumes.

MSIL has reported stronger-than-expected underlying margins (12.9%), led by
operating leverage and lower sales promotion expenses (discounts).

Maruti Suzuki India Limited (MSIL) is an automobile manufacturer with a 56.2% ownership in Japanese car and motorcycle manufacturer Suzuki Motor Corporation. It is one of the largest passenger car companies and...

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Maruti Suzuki India Limited (MSIL) is an automobile manufacturer with a 56.2% ownership in Japanese car and motorcycle manufacturer Suzuki Motor Corporation. It is one of the largest passenger car companies and...

EBITDA margin remained under pressure declining to 7.9% (as against 14.4% in Q4FY21) owing to higher input costs during the quarter. On the other hand, recovery could be seen in the bottom-line, as the reported net loss declined to Rs. 4,451cr (vs. Rs. 8,438cr loss in Q1FY21...

TTMT's 4QFY21 results were operationally in-line, both for JLR and S/A. However, adjusted for one-offs, PAT came in lower at Rs27.5b (PLe Rs35.5b). S/A performance continues to improve led by 110bp QoQ expansion in PV/CV margins each at 4.9%/9.1%. Yet, JLR margins contracted by 50bp QoQ to 15.3% led by lower ASPs at GBP53.3k/unit (v/s 58.3k/unit in 3QFY21). China...

For MSIL, we build PAT CAGR of 26.8% in FY21P-23E. We retain our cautious stance on the company courtesy further strain on margins and lost ground in UVs with present valuations continuing to be far above our comfort zone (trades at 29x P/E on FY23E). We continue to await decisive actions from MSIL on the EV front, retain REDUCE and value it at | 6,080 i.e....

and arrive at a TP of Rs6,100 (earlier Rs7,912) based on PER of 27x FY23E EPS. Key Highlights and Investment Rationale EBITDA margin below estimates: Net revenues increased 32% YoY/2% QoQ to Rs240bn whereas export revenue increased 15% YoY to Rs13bn. Volumes for the quarter increased...

Tata Motors (TTMT) hosted an Investors Day for the JLR business (Link for Change in Estimates | Target | Reco as 1) positive cash-flow from FY23 (v/s FY22 targeted earlier due to one-time...

We downgrade TTMT to reduce (from Hold) with TP of Rs231 (v/s Rs172) as we feel the sharp rally in stock recently factors in benefits expected from softer Brexit norms and consolidated entity turnaround to profits. This is captured by forward valuations reaching 10 year LPA. Also Looking at peer valuations, BMW and Daimler are trading at 0.2x EV/ Sales and 3-4x EV/EBIT with better growth and balance sheet. With the weak financial performance in...

For MSIL we build sales, PAT CAGR of 16.3% & 27.1% respectively in FY21E23E. In our view, lack of sufficient margin expansion triggers puts already stretched valuations under further strain (trades at ~33x FY23E EPS). We also await decisive commentary from MSIL on the EV front. We maintain our cautious stance on MSIL and value it at | 7,000 i.e., 30x P/E on FY23E EPS...

Maruti (MSIL) reported Q3FY21 earnings of Rs 19bn backed by higher other income and a lower tax rate.

Domestic auto industry volumes have been on a steady mend in the months post lifting of lockdown restrictions. Manufacturing and distribution activities have been getting ramped up gradually since June 2020, in step with the rest of the economy. However, the impact of the pandemic on the supply chain continues to inhibit a complete return to production normalcy. Nevertheless, most automotive industry segments have reported successive improvement in offtake throughout June-November 2020 (Exhibit 1) on the back of (i) initial bounce provided by pent-up aspect,...

M&M;'s (MM) Q2FY21 revenue grew 6% YoY to Rs 115.9bn and EBITDA margin was above our estimate at 17.8%.