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MOSL: AUTOMOBILES | AUG-18 VOLUMES: 1. Bajaj Auto; 2. Hero MotoCorp; 3. Mahindra & Mahindra; 4. Maruti Suzuki; 5. Tata Motors; 6. Ashok Leyland

Automobiles | AUG-18 VOLUMES: 1. Bajaj Auto; 2. Hero MotoCorp; 3. Mahindra & Mahindra; 4. Maruti Suzuki; 5. Tata Motors; 6. Ashok Leyland; 7. Eicher Motors; 8. TVS Motor; 9. Escorts

 

 

Bajaj Auto: Volumes of 437k units exceed estimate of 397.5k units; Domestic volumes up 27% YoY, exports up 35% YoY

• BJAUT's Aug-18 sales increased 30.5% YoY to 437k units, above our estimate of 397.5k units.
• Domestic volumes grew 27% YoY to 255.6k units (est. of 231k units), while exports increased 35% YoY to 181.4k units (est. of 166k units).
• Motorcycle volumes increased 28% YoY. Domestic motorcycle dispatches grew 27% YoY to 218k units. Motorcycle exports increased 29% YoY to 144.5k units.
• 3W volumes remained strong, with overall growth of 45% YoY.
• Domestic 3W volumes maintained the positive momentum, growing 28% YoY to 37.2k units. 3W exports grew 67% YoY to 37k units.
• The stock trades at 17.8x/15.7x FY19E/20E consol. EPS. Maintain Buy.

Hero MotoCorp: In-line; volumes up ~1% YoY to 685k; Delayed festive season, West Bengal/Kerala issues result in slow demand

• HMCL's Aug-18 volumes increased ~1% YoY to 685,047 units (est. of 675k).
• FY19 YTD volumes grew ~10%, indicating healthy rural demand.
• With the peak festive season falling in the months of October and November this year, the company expects to maintain healthy double-digit growth trajectory in the coming months.
• HMCL trades at 16.8/14.9x FY19E/20E EPS. Maintain Neutral.