Motilal Oswal - MOSL: AUTOMOBILES July 2019 wholesales-TTMT (-36% YoY) and ESC (-13% YoY) disappoint

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Motilal Oswal

Jinesh Gandhi

EUR 120.00 For Business Accounts Only

MOSL: AUTOMOBILES July 2019 wholesales-TTMT (-36% YoY) and ESC (-13% YoY) disappoint

Automobiles July 2019 wholesales: TTMT (-36% YoY) and ESC (-13% YoY) disappoint

Tata Motors: Wholesales below est. at 36.3k units (v/s est. 44.3k); CVs decline 35% YoY while PVs decline 38% YoY

Jul'19 sales volumes declined 36% YoY to 36.3k units (v/s est. 44.3k units).
Total CV volumes declined 35% YoY to 25.7k units (v/s est. 32k units).
M&HCV volumes declined 42% YoY to 9.4k units (v/s est. 12.5k units).
LCV volumes declined 31% YoY to 16.3k units (v/s est. 19.5k units).
CV retail sales are estimated to be higher than wholesales by 38%, thereby reducing dealer stocks.
PV segment sales declined 38% YoY to 10.6k units (v/s est. 12.25k), as car segment volumes declined 46% YoY to 6.2k units (v/s est. 6.75k units). UV volumes declined 22% YoY to 4.44k units (v/s est. 5.5k units). We believe the UV business saw some impact of new competition from Hyundai Venue.
In PVs as well, retails were slightly better than wholesales, resulting in stock reduction.
For both CVs and PVs, the company will continue focusing on reduction of system stock, in light of considerable contraction in demand and upcoming transition to BS6 from Apr'20.
The stock trades at 8.5x FY21E consol. EPS and 3x EV/EBITDA. Maintain Neutral.

05/08/2019 1 EN

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Jinesh Gandhi

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MOSL: AUTOMOBILES July 2019 wholesales-TTMT (-36% YoY) and ESC (-13% YoY) disappoint

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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