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MOSL: AUTOMOBILES | July 2017 volumes-1. Ashok Leyland-2. Bajaj Auto-3. Hero MotoCorp-4. TVS Motor

​AUTOMOBILES | July 2017 volumes: 1. Ashok Leyland; 2. Bajaj Auto; 3. Hero MotoCorp; 4. TVS Motor

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1. Ashok Leyland: Above estimate at 12.33k (+11% YoY, v/s est 10.05k); MHCVs grew 6% while LCVs grew 29% YoY

• ​June-17 dispatches were better than estimates. Overall volume grew by 11% YoY (+36% MoM) to 12,330 units (v/s est. 10,050 units).
  
• M&HCV volumes which accounted for ~74.6% of the total volumes increased by ~6% YoY (+50% MoM) to 9,202 units (v/s est 7,200 units).
  
• LCVs (Dost & Stile) at 3,128 units (v/s est 2,850 units) grew by ~29% YoY as volumes have been recovering post demonetization impact.
  
• The stock trades at 17.8x/14.1x FY18E/FY19E EPS and at 9.8/7.8x EV/EBITDA. Maintain Buy.
  

2. Bajaj Auto: Below estimate at ~244.8k (est. 308k); -22.7% YoY; Domestic volume decline -34.5% YoY; exports down 4.3% YoY

• BJAUT’s June 2017 sales were 244,878 units (lower than est. of ~308,000), -22.7% YoY. Domestic volume declined 34.5% YoY (-27% MoM) while exports declined 4.3% YoY. Overall FY18 volume est. at 4.02m asking for a residual monthly run rate of 313.3k units.
  
• Overall motorcycle volumes declined by ~25.1% YoY as domestic motorcycle sales declined 36% YoY to 108.1k as growth continues to be under pressure. Motorcycle exports declined by 7.8% YoY.
  
• Management indicated postponement of purchase impacted domestic volume which is expected to normalize August 2017. Domestic retails for the month were higher by ~50K units compared to wholesale numbers.
  
• Total Dominar volume for June-17 came in at ~2k units compared to ~2.7k units. Management is very positive on the brand going forward. As per management on Dominar, “every single customer is satisfied with it and the company expects to sell 10,000 units per month (domestic and export) by March 2018.”