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MOSL: AUTOMOBILES | DEC-18 VOLUMES-1. Bajaj Auto, 2. Hero MotoCorp, 3. TVS Motor, 4. Ashok Leyland

Automobiles | DEC-18 VOLUMES: 1. Bajaj Auto, 2. Hero MotoCorp, 3. TVS Motor, 4. Ashok Leyland

 

1. Bajaj Auto: Wholesales in-line at 346.2k units; Domestic volumes up 21% YoY, exports up 16% YoY

• BJAUT's sales increased 18.3% YoY to 346.2k units (in-line) in Dec'18.
• Domestic volumes grew 20.6% YoY to 180.4k units (our estimate: 184k), while exports increased 15.9% YoY to 165.8k units (our estimate: 171.5k).
• Motorcycle volumes increased 30.6% YoY in the month, with domestic dispatches up 39.2% YoY to 157.3k units and exports up 22.2% YoY to 141.6k units.
• 3W volumes declined 25.8% YoY to 47.3k units (our estimate: 60.5k), with domestic volumes down 36.9% YoY to 23k units and exports down 10.9% YoY to 24.2k units.
• The stock trades at 17.2x/14.8x FY19E/20E consol. EPS. Maintain Buy.

2. Hero MotoCorp: Volumes of 453.9k below estimate of 480k; Increased 2W cost and liquidity crunch impact sales momentum

• HMCL's Dec-18 volumes declined ~4% YoY to 453,985 units (our estimate: 480,000). Volumes, however, are up ~8% for FY19YTD.
• The company attributed the sales decline to increased cost of ownership and the prevailing liquidity crunch in the market.
• HMCL trades at 17.6/16.3x FY19E/20E EPS. Maintain Neutral.