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MOSL: AUTO VOLUMES: APRIL-19 VOLUMES-Weakness continues on a high base

AUTO APRIL-19 VOLUMES (Weakness continues on a high base)

1. Maruti Suzuki: Wholesales below est. at 143.2k units (v/s est. of 150k units); Domestic dispatches decline 19% YoY, while exports grow 14.6% YoY

• MSIL's Apr'19 wholesales came in below estimates at 143.2k units (-17.2% YoY).
• Domestic volumes declined 19% YoY to 134k (v/s est. of 140.5k).
• Export volumes were in line with estimates at 9.2k units (+14.6% YoY).
• Volumes in the mini and compact segment are not comparable YoY due to change in reporting.
• MSIL's first-ever supply to Toyota - 364 units of compact cars - began in Apr'19.
• The stock trades at 29.4x/23.5x FY20E/21E earnings. Maintain Buy.

2. Escorts: Wholesales below est. at 5.3k units; Domestic sales decline 18% YoY

• Escorts tractor dispatches declined 14.9% YoY to 5.3k units (v/s est. of 6.9k units).
• Domestic sales declined 18.2% YoY to 4.98k units.
• Exports grew a whopping 202% YoY to 278 units.
• The stock trades at 12.3x/11.7x FY20E/21E EPS. Maintain Neutral.

3. Eicher Motors: Royal Enfield volumes in line at 62.9k units (-17.5% YoY); VECVs below estimates led by lower exports

• Royal Enfield (RE) dispatches were in line, with decline of 17.5% YoY (+3.4% MoM) to 62.9k units (v/s est. of 65k units).
• Sales of models up to 350cc capacity declined 21% YoY to 55.5k units, while that of models with engine capacity exceeding 350cc increased 21% YoY to 7.4k units.
• Domestic sales declined 21% YoY while exports grew 140%.
• VECV Apr'19 volumes of ~4k units (flat YoY) were below estimate at ~4.6k units.
• Domestic LMD, HD and Buses segment grew 12.5%, 1.5% and 3.9%, respectively.
• VECV exports declined 60% YoY to 219 units.