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MOSL: AUTO APRIL-19 VOLUMES-Wholesales weak across segments; inventory correction continues

AUTO APRIL-19 VOLUMES (Wholesales weak across segments; inventory correction continues)

 

1. Bajaj Auto: Wholesales of 423.3k units in line with estimate; Domestic volumes up 1% YoY, exports up 3% YoY

• BJAUT's sales increased 2% YoY to 423.3k units (in-line) in Apr'19.
• Domestic volumes grew 1.2% YoY to 232k units (our estimate: 240k units), while exports increased 3% YoY to 191.2k units (our estimate: 166.5k units).
• 2W volumes grew 4.8% YoY to 366.3k units. Domestic motorcycle dispatches increased 2.6% YoY to 205.9k units. Motorcycle exports grew 7.7% YoY to 160.4k units.

2. Hero MotoCorp: Wholesales down 17% YoY to 574.4k (in-line); Continued challenging market conditions

• Apr-19 volumes declined 17% YoY to 574,366 units (in-line).

3. TVS Motor: Wholesales increase 4.7% YoY to 319k units (in-line); Domestic sales up 2.6% YoY, exports up 12.6% YoY

• Wholesales stood at 319k units in Apr'19 (in line with our estimate of 310.8k units).
• Domestic volumes grew 2.6% YoY, while exports (22% of volumes) rose 12.6% YoY.
• Motorcycle volumes increased 8.6% YoY to 143.1k units (our estimate: 137k units).
• Scooter volumes increased 9.1% YoY to 97.3k units (our estimate: 93.5k units).
• Moped dispatches declined 9.6% YoY to 65.5k units (our estimate: 67.5k units).

4. Ashok Leyland: Wholesales above estimate at 13.6k units; MHCVs sales up 4% YoY, while LCV sales up 15.4% YoY

• Apr-19 wholesale dispatches increased 7.5% YoY to 13.6k units, exceeding our estimate.
• M&HCV volumes, which account for 68.5% of total volumes, rose 4% YoY (-41.7% MoM) to 9.3k units (our estimate: 8.5k units).
• LCV sales grew 15.4% YoY to 4.3k units (our estimate: 3.9k units).

5. Mahindra & Mahindra: Wholesales miss our estimate as UVs disappoint; Tractor sales down ~8%, UV sales down 9.3% YoY

• MM’s tractor volumes of 28.6k units (-7.7% YoY) were above our estimate of 26.5k units.
• UV (incl. pick-ups) sales declined 9.3% YoY to 38.4k (our estimate: 44k). Domestic passenger UV and domestic pick-up segment sales declined each by 7% YoY.
• 3W volumes declined 0.3% YoY to 4.3k.
• Commenting on the month’s performance, Rajan Wadhera, President – Automotive Sector, M&M Ltd said: “The ongoing election has subdued the purchase sentiment during April. This, according to us, is a temporary phenomenon. We believe, following the elections the auto industry will see a revival in consumer demand. Supported by a normal monsoon, we are confident of seeing higher sales in FY20.”

Tata Motors: Wholesales of 44k units below our estimate of 54.6k; CV sales down 20.5% YoY, PV sales down 26% YoY

• Apr-19 sales declined 19.5% YoY to 44k units, below our estimate of 54.6k units.
• CV volume declined 20.5% YoY to 31k units (our estimate: 38k).
• M&HCV volumes were down 30.1% YoY to 12.7k units (our estimate: 16.6k).
• LCV volumes declined 12.1% YoY to 18.4k units (our estimate: 21.5k).