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MOSL: AUTOMOBILES | JUNE-18 VOLUMES-1. MAHINDRA & MAHINDRA; 2. BAJAJ AUTO; 3. HERO MOTOCORP

Automobiles | jUNE-18 VOLUMES: 1. Mahindra & Mahindra; 2. BAJAJ AUTO; 3. Hero MotoCorp; 4. Ashok Leyland; 5. TVS Motor; 6. Escorts

 

Mahindra & Mahindra: Tractor wholesales above estimate at 40.5k units; Domestic volumes up 24% YoY, exports down 13% YoY

• MM’s tractor volumes grew 22.5% YoY to 40.5k units (est. of 35k units) in June-18.
• Domestic volumes grew 24% YoY to 39.3k units, while exports declined 13% YoY to 1.3k units.
• For 1QFY19, MM’s overall tractor volumes grew 18.6% YoY to 100.8k units.
• Speaking on the monthly tractor performance, Rajesh Jejurikar, President, Farm Equipment Sector, M&M Ltd. said, “We have sold 39,277 tractors in the domestic market during June 2018, a growth of 24% over same month last year. With the healthy spread of monsoon across the country, we are hopeful of a good agricultural output, leading to improved market sentiment. In our exports market we sold 1,252 tractors.”
• The stock trades at 17.7x/16.3x FY19E/20E. Maintain Buy.

Bajaj Auto: Dispatches of 404k units exceed estimate of 383.5k units; Domestic volumes grew 84.7% YoY, exports up 44.1% YoY

• BJAUT’s June-18 sales increased 65.2% YoY to 404.4k units, above our estimate of 383.5k units.
• Domestic volumes grew 84.7% YoY to 234.6k units (est. of 208k units), while exports increased 44.1% YoY to 169.9k units (est. of 175.5k units).
• Overall motorcycle volumes increased 65% YoY. Domestic motorcycle dispatches increased 86% YoY to 200.9k units. Motorcycle exports grew 41.7% YoY to 136.8k units.
• 3W volumes remained strong, with overall growth of 65.8% YoY.
• Domestic 3W volumes maintained the positive momentum, growing 78.2% YoY to 33.6k units. 3W exports grew 54.8% YoY to 33.1k units.
• The stock trades at 16.6x/14.3x FY19E/20E consol. EPS. Maintain Buy.