auto sector report_cruising through barriers

8/12/2019 Auto Sector Report_Cruising Through Barriers

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AUTO SECTOR

Cruising through barriersSeptember, 2011

Despite outperformance of the

sector, valuations are stilleasonable

Adequate near term and long termriggers in place

See more value in four wheelers ascompared to two wheelers

Chirag ShahSenior Research [email protected]+91 22 66121252

Siddhartha BeraResearch [email protected]+91 22 66242494


2/51

Emkay Research 7 September, 2011

Auto Sector

2

Contents

Sector

Synopsis .........................................................................................................................................................................3

Sector view

We have been overweight on the sector post 3QFY11, despite obvious near term concerns ....................................... 4

Near term concerns are yet to play out fully; 3QFY12 to witness maximum impact ................................................... 6

Near term positives ....................................................................................................................................................8

Long term view ......................................................................................................................................................... 10

Commercial vehicles ........................................................................................................................................... 10

Tractors .............................................................................................................................................................. 16

Passenger vehicles ............................................................................................................................................. 19

Two wheelers ...................................................................................................................................................... 22

Companies

Ashok Leyland .............................................................................................................................................................. 26

Bajaj Auto ..................................................................................................................................................................... 29

Eicher Motors ............................................................................................................................................................... 32

Hero MotoCorp .............................................................................................................................................................. 35

Mahindra & Mahindra .................................................................................................................................................... 38

Maruti Suzuki India ....................................................................................................................................................... 41

Tata Motors ................................................................................................................................................................... 44

TVS Motor..................................................................................................................................................................... 47


3/51


Auto Sector

3

Synopsis

We have been overweight on the automobile sector post 3QFY11 with ~88% of the

stocks having a positive view as compared to only ~43% in the preceding quarter. This

was despite the near term concerns like higher interest rate/inflation, base effect, etc.

Our view was primarily based on (1) Valuations (especially relative valuations), whichwere trading at a significant discount due to excessive focus on near term concerns

(2) Strong cash flow generation and high ROIC business (3) Our FY11-FY13E estimates

factoring in the slowdown impact.

Our automobile universe has since then outperformed the broader market indices

significantly with some stocks even posting absolute returns. Despite the strong

relative outperformance, we still find the current valuations reasonable as our analysis

reveals adequate near term positives as well as long term triggers. The near term

positives emerge from (1) High base effect of inflation/interest rate (2) Favorable base

effect for IIP (3) Good monsoon and (4) Easing of raw material cost pressures.

Similarly, our long term analysis reveals ample growth potential across segments,which are enumerated below..

M&HCVs The positives emerge from (1) High multiplier effect (2) Strong demand

during weak IIP but strong agri GDP (3) Diminishing lag impact of IIP and (4) No

impact of higher fuel prices on demand. Also, availability of finance is more important

than interest rates

Tractors The positives emerge from (1) High multiplier effect (2) Higher farm

income and land prices (3) Increasing reach of formal financing channels (4) Labour

shortage and (5) Industry consolidation

Passenger vehicles The positives emerge from (1) Low penetration levels (income

and geographical) (2) High multiplier effect (3) Significant correlation with wealth

creation & employment and (4) availability of finance rather than interest rates

Two wheelers The positives emerge from (1) Low penetration levels (income and

geographical) (2) Rising rural income vis--vis urban income (3) Low reliance on

finance (stable demand) and (4) Improving multiplier effect (since FY08)

However, we would like to caution that the near term concerns are yet to play out fully

and expect 3QFY12 to witness maximum impact of the same. The impact will be

different across segments. We expect maximum impact on PVs/M&HCVs. The recent

strong outperformance of the stocks can result in a subdued performance of the

sector in the near term. We believe 3QFY12 provides a solid opportunity to re-enter

auto stocks.

We retain our overweight position on the sector. However, from here on, maximum

value is in four wheelers mainly due to upgrade in valuations as well as earnings over

next 4 quarters. From hereon, two wheeler stocks will track earnings/dividend yield

with limited scope for valuation re-rating. Also, we are changing our recommendations.

We have downgraded our rating for two wheeler stocks a notch lower. We downgrade

Bajaj Auto from BUY to ACCUMULATE, Hero Honda from HOLD to REDUCE and TVS

Motor from ACCUMULATE to HOLD. We retain BUY on M&M, Tata Motors and Eicher

Motors. Despite attractive valuations, we retain our ACCUMULATE on Ashok Leyland

and Maruti, due to company specific issues. Key concerns arise from a slump in

economic activity and /or a sharp jump in metal prices.


4/51


Auto Sector

4

0%

20%

40%

60%

80%

100%

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Sep-11

90

100

110

120

130

140

% Positive Outlook Stock Perf. Nifty Perf.

Perf . (Indexed to 100)Rel to Nifty Index (%)

Company Name 1d 1 w 1m 3 m 6 m 12m

Ashok Leyland 3.3 5.3 11.9 15.3 13.0 -20.8

Bajaj Auto -0.3 3.1 20.4 33.3 29.8 21.0

Eicher Motors -0.3 1.3 4.0 12.3 39.6 19.3

Hero MotoCorp -1.4 7.0 22.7 27.7 50.4 38.1

Mah & Mah -1.4 5.9 23.3 29.8 28.4 38.2

Maruti Suzuki India -1.3 -0.2 -6.3 -3.7 -6.7 -8.5

Tata Motors -1.8 1.8 -13.3 -19.7 -28.0 -20.0

TVS Motor 0.6 7.4 16.8 19.4 22.2 -11.9

We have been overweight on the sector post 3QFY11, despiteobvious near term concerns

As can be seen from the graph below, we have been significantly overweight on the

sector, post 3QFY11 results with positive outlook on 88% of the stocks under our coverage

as compared to 43% in the preceding quarter. This was despite obvious near term

concerns like lower IIP/GDP, higher interest rates/inflation, expected diesel price hikeand the high base effect of the last two years.

Source: Emkay Research

Changing view on the sector, post the result season

Our overweight view on the sector stands vindicated as is reflected by the strong relative

performance of most auto stocks, with select stocks delivering absolute performance

(refer graphs below).


Our view on sector and sector performance

Source: Bloomberg, Emkay Research

Stock performance (relative to nifty)

Our view was based on valuations, especially relativevaluationsthough some catch up has happened since then

Relative valuations were the most important factor for our overweight view on the sector.

Relative valuations of most auto companies were at a discount to that of broader indices

implying that the street was (1) excessively focusing on near term earnings and (2)

ignoring the strong balance sheet and cash flow generation. Since then, the valuation

gap has been bridged to some extent, owing to the recent outperformance of most auto

stocks.

Despite the recent run up, valuations still leave room forupsides

40%

50%

60%

70%

80%

90%

Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Sep-11

% Reco w ith Positive Outlook

Our overweight view post 3QFY11

earnings was driven by valuations,

esp. relative valuations


5/51


Auto Sector

5

-40%

40%

120%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

0

5

10

15

20

25

Rel.Stck.Perf. (% LHS) Consensus (PE)Ac tual (PE)

PE

-20%

-10%

0%

10%

20%

30%

40%

50%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

-20%

-10%

0%

10%

20%

30%

40%

50%

Prem/Disc vs Sensex Volumes (RHS)

-50%

0%

50%

100%

150%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

0

5

10

15

20

25

30

Rel. Stck Perf. (% LHS) Consensus (PE)

Actual(PE)

PE

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Apr-04

Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

-40%

-20%

0%

20%

40%

60%

Prem/Disc Vs Sensex Volumes(RHS)

-50%

0%

50%

100%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

0

5

10

15

20

25

Rel.Stck.Perf. (% LHS) Consensus (PE)

Ac tual (PE)

PE

-40%

-20%

0%

20%

40%

60%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

-40%

-20%

0%

20%

40%

60%


-50%

0%

50%

100%

150%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

0

5

1015

20

25

30

Rel. Stck.Perf. (% LHS) Consensus (PE)

Ac tual (PE)

PE

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

-100%-80%

-60%-40%-20%0%20%

40%60%80%

100%120%



AL - Volumes and Relative valuation (PE)


AL - Relative perf. and valuations 1 year forward


MSIL - Volumes and Relative valuation (PE)


MSIL- Relative perf and valuations 1 year forward


MM - Volumes and Relative valuation (PE)


MM - Relative perf and valuations 1 year forward


HMCL - Volumes and Relative valuation (PE)


HMCL - Relative perf and valuations 1 year forward


6/51


Auto Sector

6

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%


-80%

-30%

20%

70%

120%

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

-10

0

10

20

30

40

Rel.Stck.Perf.(% LHS) Consensus Actual

PE


TVSL - Volumes and Relative valuation (PE)


TVSL - Relative perf and valuations 1 year forward

Near term concerns are yet to play out fully; 3QFY12 to witness maximumimpact

The impact of slowdown is yet to be fully visible. We expect 3QFY12 to reflect the fullimpact of higher interest rate, inflation, etc. The recent outperformance of the stocks can

result in a period of stock underperformance. However, the impact will be diverse across

segments and across players. We expect maximum impact on PV/M&HCVs. We expect

lower impact on two wheelers/UVs/tractors. We believe that 3QFY12 will provide a good

opportunity to re-enter the auto stocks as there are near term as well as long term positives

(discussed separately), which are likely to drive stock performance.

Source: CMIE, Emkay Research

Subdued GDP/IIP growth


Interest rates - at historic highs

PLR (%)

10

11

12

13

14

O

ct-02

F

eb-03

J

un-03

O

ct-03

F

eb-04

J

un-04

O

ct-04

F

eb-05

J

un-05

O

ct-05

F

eb-06

J

un-06

O

ct-06

F

eb-07

J

un-07

O

ct-07

F

eb-08

J

un-08

O

ct-08

F

eb-09

J

un-09

O

ct-09

F

eb-10

J

un-10

O

ct-10

F

eb-11

J

un-11

0%

4%

8%

12%

16%

Jun-00

Dec-00

Jun-01

Dec-01

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

Jun-11

0%

2%

4%

6%

8%10%

12%

IIP (% YoY) GDP (% YoY RHS)


7/51


Auto Sector

7

(100)

(50)

-

50

100

Sep-02

Mar-03

Sep-03

Mar-04

Sep-04

Mar-05

Sep-05

Mar-06

Sep-06

Mar-07

Sep-07

Mar-08

Sep-08

Mar-09

Sep-09

Mar-10

Sep-10

Mar-11

-40%

-30%

-20%

-10%0%

10%

20%

30%

40%

Change in PLR (QoQ) Cars (% YoY)

(bps)

-100

-75

-50

-25

0

25

50

75

100

Dec-01

Apr-02

Aug-02

Dec-02

Apr-03

Aug-03

Dec-03

Apr-04

Aug-04

Dec-04

Apr-05

Aug-05

Dec-05

Apr-06

Aug-06

Dec-06

Apr-07

Aug-07

Dec-07

Apr-08

Aug-08

Dec-08

Apr-09

Aug-09

Dec-09

Apr-10

Aug-10

Dec-10

Apr-11

-150%

-100%

-50%

0%

50%

100%

150%

Change in PLR (QoQ) Trucks (% YoY)

(bps)

Source: SIAM, CMIE, Emkay Research

M&HCV Truck demand in rising interest rate scenario

Source: SIAM, Emkay Research

Cyclicality of demand resulting in moderation in growth

As can be seen from the graphs below, increase in interest rates seem to result in slower

demand growth. A pertinent point to note is that a sustained increase in interest rates

generally follows a strong demand environment. The auto industry is inherently cyclical in

the short term, resulting in periods of above average growth and below average growth.

More importantly, higher interest rates have not resulted in decline in demand, except

for 2008 period. The decline in two wheelers during FY07-FY08 was also due to systemic

issues, resulting in sharp fall in penetration of finance.


Car demand in rising interest rate scenario


Two wheeler demand in rising interest rate scenario

-20%

-10%

0%

10%20%

30%

40%

50%

Sep-02

Dec-02

Mar-03

Jun-03

Sep-03

Dec-03

Mar-04

Jun-04

Sep-04

Dec-04

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

-100%

-50%

0%

50%

100%

150%

Motorcycles PVs M&HCVs (RHS)

-100

-75

-50

-250

25

50

75

100

Sep-02

Sep-03

Sep-04

Sep-05

Sep-06

Sep-07

Sep-08

Sep-09

Sep-10

-40%

-30%

-20%

-10%0%

10%

20%

30%

40%

Change in PLR (QoQ) 2 Wheelers (% YoY)

(bps)

Higher interest rates results in

slowdown but not decline in demand


8/51


Auto Sector

8

0%

4%

8%

12%

16%

20%

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Our FY11-13 estimates factor in above concerns

Our volume estimates across segments factor in the above concerns and are still below

the historical growth rates. What we have not factored in is a drop in demand in case of

a slump in economic activity. Also, between FY12 and FY13, the growth is back ended.

CAGR (% YoY) FY97- FY99- FY01- FY03- FY05- FY07- FY09- FY11-

Domestic FY99 FY01 FY03 FY05 FY07 FY09 FY11 FY13E

Cars 1.4 21.6 (2.3) 23.1 14.6 6.4 27.5 10.0

UVs (9.3) 6.1 (3.8) 24.6 11.8 1.2 19.8 11.4

M&HCV trucks (30.5) 0.6 29.3 34.4 19.5 (22.4) 36.1 9.0

M&HCV bus (6.5) 5.0 (10.2) 13.4 5.8 10.2 19.1 8.5

Two wheelers 7.9 4.9 12.8 14.3 12.7 (3.7) 26.0 13.3

Tractors 5.5 (3.0) (18.2) 19.3 17.9 (1.5) 25.8 12.5

GDP 5.5 5.4 4.8 8.0 9.5 8.0 8.3

Agri 1.8 1.2 -0.7 4.9 4.9 3.2 2.8

IIP 5.4 5.8 4.2 9.3 9.9 5.9 9.2

Source: CMIE, SIAM, Emkay Research

Dom. % YoY FY10 FY11 FY12E FY13E

Cars 25.2 29.9 5.0 15.0

UVs 20.8 18.9 8.0 15.0

M&HCV trucks 36.2 36.0 6.0 12.0

M&HCV bus 23.4 15.0 5.0 10.0

Two wheelers 26.2 25.8 12.6 14.0

Tractors 32.2 19.8 11.0 14.0


Near term positives

Base effect of IIP/inflation and good monsoon are the sentimental positives

Over the next two quarters, positive base effect will be the first sentimental positive

towards auto stocks. As can be seen from the graph below, IIP has been subdued since

August 2010. Similarly, inflation has been on the higher side for a long time now. The

only uncertain area is high oil prices as it can delay the base effect benefit from coming

into play. The monsoon season (till date) this year has been good not only in terms of

quantity (1% below average) but also in terms of spread (only 4 areas with scant rainfall

and rain dependent region receiving above average rainfall)


IIP growth bottoming out


9/51


Auto Sector

9


Base effect should result in lower inflation

Monsoon - good spread will ensure a decent agri GDP despite a high base

Particulars FY08 FY09 FY10 FY11 FY12*

% Deviation

Well Irrigated areas -65.3 15.2 -39.2 -9.2 -8.6

Adequately Rain-fed areas 9.5 -9.7 -19.8 -2.1 -5.6

Rain Dependent Areas 13.5 -1.0 -18.8 3.9 6.8

No of divisions

Excess rainfall 13 1 3 13 8

Normal rainfall 17 32 10 18 24

Deficient/Scanty rainfall 6 3 23 5 4

Note: * - Indicates year till date


Raw material costs - the wild card

Our analysis indicates that metals account for ~22% to 45% of sales. It is lowest for two

wheelers and highest for M&HCVs. Given below is the sensitivity of auto companies'

margins to changes in metal prices.

RM cost impact

EBITDA Margin (%) Change in EBITDA margins (bps)

Change in metal prices FY12E 5% 7.5% 10%

Ashok Leyland 10.6 158 237 316

Bajaj Auto 18 94 141 188

Hero MotoCorp 11.3 119 178 237

M&M 12.8 101 151 201

MSIL 9.2 101 151 201

TVS Motor 6.4 103 154 205

Source:Company, Emkay Research

We believe that metal prices can be the wild card, providing positive surprises in the

near term, We have built in a normal inflationary pressure of 7% per annum in our

estimates for FY12 and FY13. HR steel and aluminum prices are trading at its historic

highs (except for the CY09 period). Our interaction with various industry players indicate

that they do not expect metal prices to increase in the same manner as in FY11. In the

event of metal prices cooling off or stabilizing at the current levels, there can be positive

margin surprises.

-5

0

5

10

15

20

Jul-94

Jul-95

Jul-96

Jul-97

Jul-98

Jul-99

Jul-00

Jul-01

Jul-02

Jul-03

Jul-04

Jul-05

Jul-06

Jul-07

Jul-08

Jul-09

Jul-10

Jul-11

Monsoons have been good both in

terms of quantity and spread


10/51


Auto Sector

10

0

200

400600

800

1000

1200

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11


Steel prices (USD/ton)


Aluminum prices (USD/ton)

Long term view

We believe that the near term concerns provide an excellent opportunity to become

overweight on auto, given the long term view. Based on analysis of each segment

(commercial vehicles, tractors, passenger vehicle and two wheelers), we believe that

the long term story in each segment is still intact and that demand will bounce back with

a vigor. This has happened in the past and we expect the same to repeat. The biggest

risk that we foresee to this is non availability of finance (rather than higher interest rate),

lack of employment generation (due to slowdown in core economy) and slower wealth

generation (reflected by Sensex/real estate prices). Given below is our analysis of growth

prospects for each of the segments, which give a clear view on the structural strength of

demand.

Commercial vehicles

Multiplier effect

Our analysis of historical data indicates that the elasticity/multiplier effect on demand

has increased over a period of time. We have calculated the multiplier effect as M&HCV

trucks volume growth/IIP and volume growth/industry growth (based on constant prices).

We have used 5/3 year rolling CAGR, as analysis on annualized basis is inherently

cyclical and misleading. As can be seen from the graph below, both on 5 year and 3 year

CAGR, the trend line has been inching up. For instance, the multiplier based on IIP has

increased from 0.5x in FY87 to ~1.5x in FY11. This basically indicates that with growing

economic activity, the freight generation in the system is increasing at a higher rate thanthe broader economic growth.

0

500

1000

1500

2000

2500

3000

3500

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Multiplier effect is one of the most

important driver for volumes


11/51


Auto Sector

11

(2)

(1)

-

1

2

3

4

FY87

FY89

FY91

FY93

FY95

FY97

FY99

FY01

FY03

FY05

FY07

FY09

FY11

Vols/Industry Vols/IIP

Trendline (Vols/Ind) Trendline (Vols/IIP)

(6)

(4)

(2)

-

2

4

6

FY86

FY88

FY90

FY92

FY94

FY96

FY98

FY00

FY02

FY04

FY06

FY08

FY10

Vols/Industry Vols/IIP

Trendline (Vols/Ind) Trendline (Vols/IIP)

0%

2%

4%

6%

8%

10%

12%

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Share of road transport

-

50

100

150

200

250

300

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

34

36

38

40

42

44

Truck Vols Agri+Ind. GDP/truck tonnage(RHS)

(Rs mn/ton)The drop is due to ban on

overloading

In '000 units


5 Yr Multiplier effect of M&HCV trucks demand


3 Yr Multiplier effect of M&HCV trucks demand

Higher share of agricultural commodities in road transport has also aidedthe multiplier

Over the years, there has been an increase in the movement of agricultural commodities

through road. As can be seen from the graph below, the share of road transport, which

was at 3% in FY94, has increased to 11% in FY11. This has resulted in higher freight

generation in the system, as corroborated by rising capacity utilization over the years

(indicated by Industry+Agri GDP/ tonnage). This fact is also supported by the strong

growth in M&HCV during weak IIP period especially when agri economy has done well

as explained below.The sharp drop in the ratio during FY05-06 is due to implementation

of ban on overloading, which resulted in structurally lower utilization of trucks.


Rising agri transport aiding multiplier effect

Source: FCI, Emkay Research

Increasing share of road transport in food grains

M&HCV demand has been strong during weak IIP but strongagricultural growth period

As can be seen from the graphs on next page, strong agricultural growth has resulted in

robust volume growth despite a weak IIP. The only deviation has been FY99. The tables

below highlight only those periods where IIP has been subdued and agriculture GDP

has done well. In a strong IIP year, the performance of agriculture gets hidden. We also

undertook a quarterly analysis to look at the data closely. We came up with the same

conclusion (see table on next page).

Movement of agri commodities by

road has increased from ~3% to ~11%


12/51


Auto Sector

12


Strong agri supporting M&HCV truck volumes during periods of weak IIP

Growth (%) FY97 FY99 FY00 FY02 FY04 FY11

Agri GDP 9.9 6.3 2.7 6.3 10.0 6.3

IIP 6.1 4.1 6.6 2.7 7.0 8.2

M&HCV trucks 25.2 (7.1) 44.8 27.7 42.3 36.6


Growth (%) Jun-01 Sep-01 Dec-01 Mar-02 Sep-03 Dec-03 Mar-04 Dec-10

Agri GDP 3.2 5.7 6.6 8.8 7.2 19.6 10.3 8.9

IIP 2.2 2.5 2.9 3.1 6.6 7.3 8.1 5.9

M&HCV trucks 18.7 39.7 48.0 12.3 54.0 53.1 39.0 21.0


Freight rates - Ground check reveals strengthThe widely tracked TCI freight index has been indicating a subdued freight rate scenario.

This has resulted in expectations of pressure on profitability of freight operators due to

increase in capital cost, interest rate and fuel cost. However, our interaction with freight

operators and verification of freight rates on trunk routes indicates that there is a divergence

in the data captured by TCI index. As can be seen from the graphs below, since Dec08,

there is a divergence in the TCI index and freight rates on trunk routes. Our interaction with

freight operators indicates that freight rates have indeed gone up, which has enabled

them to protect the cash flow generation despite strong inflationary pressure. Also, there

is adequate availability of freight and hence, there are no major concerns with respect to

under utilization of fleet.

Source: CMIE, TCI, Emkay Research

TCI freight index and trunk route freight rates

Source: CMIE, TCI, Emkay Research

Divergence in the data in last two years

-10%

-5%

0%

5%

10%

15%

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

-40%

-20%

0%

20%

40%

60%

Agri GDP (LHS) IIP (LHS) Trucks (RHS)

-10%

0%

10%

20%

30%

40%

Apr-05

Jun-05

Aug-05

Oct-05

Dec-05

Feb-06

Apr-06

Jun-06

Aug-06

Oct-06

Dec-06

Feb-07

Apr-07

Jun-07

Aug-07

Oct-07

Dec-07

TCI Delhi Mumbai Kolkata Chennai

(YoY Chg.)

-30%

-20%

-10%

0%

10%

20%

30%

40%

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

TCI Delhi Mumbai Kolkata Chennai

(YoY Chg.)


13/51


Auto Sector

13

-50%

0%

50%

100%

150%

200%

250%

300%

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-11

-4%

0%

4%

8%

12%

16%

20%

24%

IIP (% YoY RHS) Trucks (% YoY)

IIP favourable base effect to kick inmore importantly the lag effect hasbeen slowly reducing

We expect a favorable base effect to kick in from Aug'11. More importantly, the lag impact

of weaker IIP and demand slowdown has been reducing over the years . As indicated

earlier, this can be attributed to our thesis of higher freight generation in a growing economy.


IIP favorable base effect to kick in


Reducing lag impact of IIP on truck volumes

-8%

-6%-4%

-2%

0%

2%

4%

6%

8%

M

ar-91

M

ar-93

M

ar-95

M

ar-97

M

ar-99

M

ar-01

M

ar-03

M

ar-05

M

ar-07

M

ar-09

M

ar-11

-50%

-30%

-10%

10%

30%

50%

Change in IIP Grow th ( % points) Truck Sales (% YoY RHS)

Lag impact of IIP on truck volumes is

not visible currently


14/51


Auto Sector

14

4%

6%

8%10%

12%

14%

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

-60%

-40%

-20%

0%

20%

40%

60%

1 yr deposit (LHS) Trucks (YoY)

5%

7%

9%

11%

13%

15%

20

04

-05

2005

-06

2006

-07

2007

-08

2008

-09

20

09

-10

20

10

-11

93

94

95

96

97

98

99

Finance Penetration (% RHS) Avg Loan Rate (%)

5%

7%

9%

11%

13%

15%

200

4-

05

200

5-

06

2006

-07

2007

-0

8

200

8-

09

200

9-

10

2010

-11

100

150

200

250

300

Volumes (in '000 units RHS) Avg Loan Rate (%)

Source: CRISIL, Industry, Emkay Research

Rising volumes despite higher interest rates

Source: CRISIL, Industry, Emkay Research

Finance penetration impacting volumes

Source: CMIE, Industry, Emkay Research

Correlation between interest rates and demand since 1994 - no major correlation

Demand and interest rate relationshipavailability of finance is important

Contrary to perception, higher interest rates per se are not an impediment for demand

growth from a long term perspective. It has a sentimental impact for a quarter or two. More

important is the availability of finance and freight rates. As can be seen from the graphs

below, despite rising interest rates during FY05-FY08, the penetration of finance has

been stable resulting in volume growth over the period. Given the fact that agri economy isexpected to report a strong kharif season (third consecutive season of good crops), we

expect concerns with respect to freight and M&HCV volumes to abate.


15/51


Auto Sector

15

05

10152025303540

Oct-02

Fe

b-03

Ju

n-03

Oct-03

Fe

b-04

Ju

n-04

Oct-04

Fe

b-05

Ju

n-05

Oct-05

Fe

b-06

Ju

n-06

Oct-06

Fe

b-07

Ju

n-07

Oct-07

Fe

b-08

Ju

n-08

Oct-08

Fe

b-09

Ju

n-09

Oct-09

Fe

b-10

Ju

n-10

Oct-10

Fe

b-11

Ju

n-11

20

25

30

35

40

45

50

Truck Vols ( '000 units) Diesel Price (RHS)

Demand and diesel price relationship

Interestingly, we did not come across an inverse relationship between truck sales and

diesel prices. The first graph indicates movement of diesel prices and truck volumes. The

second graph shows the relationship between change in diesel prices (MoM) and demand

for trucks (YoY). In fact, we came across certain instances (FY08 and FY09) when reduction

in diesel prices was accompanied by decline in demand.

Source: IOCL, Emkay Research

Inverse relationship in diesel price and truck volumes - Insignificant evidence


Sustained diesel price hikes moderate volume growth for 1-2 quarters at best

-2

-1

0

1

2

3

Oct-03

Feb-04

Jun-04

Oct-04

Feb-05

Jun-05

Oct-05

Feb-06

Jun-06

Oct-06

Feb-07

Jun-07

Oct-07

Feb-08

Jun-08

Oct-08

Feb-09

Jun-09

Oct-09

Feb-10

Jun-10

Oct-10

Feb-11

Jun-11

-50%

-30%

-10%

10%

30%

50%

70%

Change in diesel pr ice (Rs MoM) Truck Sales (%YoY RHS)


16/51


Auto Sector

16

(4)

(2)

-

2

4

6

8

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Vols/GDP Vols/Agri

Trendline (V ols/GDP) Trendline (V ols /Agri)

-

0.5

1.0

1.5

2.0

2.5

3.0

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Vols/GDP Vols/Agri Trendline (Vols/GDP) Trendline (Vols/Agri)

Tractors

Strong multiplier impact with agriculture but not so strong with GDP

As can be seen from the graphs below, there is a clear multiplier impact visible for tractors

vis--vis agriculture. However, when compared to GDP, the multiplier impact is not really

visible. This can be attributed to declining share of agriculture in the overall economy.

Also, increasing use of tractors for non agri purpose will have some impact on the multiplier

effect when co-related to GDP going ahead. We believe that this is sustainable and

tractor demand can explode, going forward.

Source: CRISIL, CMIE, Emkay Research

10 yr multiplier effect on tractor demand





(8)

(6)

(4)

(2)

-2

4

6

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Vols/GDP Vols/Agri

Trendline (Vols/GDP) Trendline (Vols/Agr i)

Higher non-agri use to have positive

impact on multiplier effect


17/51


Auto Sector

17

-10%

-5%

0%

5%

10%

15%

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Tractors (%YoY) Farm Income (%YoY)

-30%

-20%

-10%

0%

10%

20%

30%

40%

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

Tractors % YoY ATOT (RHS)

10

20

30

40

50

60

FY07 FY08 FY09 FY10 FY11

50

60

70

80

90

100

110

Households (in mn) Wage Rate (Rs/day RHS)

100

200

300

400

500

FY93

FY95

FY97

FY99

FY01

FY03

FY05

FY07

FY09

FY11

1400

1500

1600

1700

1800

1900

2000

Tractor Vols. Foodgrains Yield (RHS)

In '000 units Kg/hect

Sharp increase in farm income

There has been sharp increase in the farm income due to increased focus of the

government on rural economy and MSP. Also, the yield has been improving over the years.

More importantly, there is a direct correlation between demand for tractors and farm

income. Rising farm income is the output of improving yield and higher MSP. The farmer's

yield can further improve, given the increasing access to information and use of technology.The key reason for this is the role played by various fertilizer, FMCG and other rural

economy related companies. Another important reason is rising wealth due to appreciation

of land prices.


Higher mechanization and awareness improving yields


Tractor demand & farm income - 5 yr CAGR

Labour shortage - Key demand driver

Labour shortage is one of the most important structural change that will drive farm

mechanization. It is important to note that not only is there an increase in the number of

households covered under the NREGA scheme, but also there is a sharp upward revision

in minimum wages. Rising popularity of NREGA and other schemes, increasing penetrationas well focus of the government to curb leakages can further accentuate the labour

shortage problem.

Source: NREGA, Emkay Research

Employments added under NREGA

Note: ATOT is ratio of WPI food & non-food / WPI fuel & manufactured products


Higher real income levels in hands of farmer

Increasing reach of formal financing channels - to lower cost of borrowing

Another important factor according to us, is the increasing focus of the RBI to raise the

penetration of finance in the rural economy. This is clearly indicated by rising rural credit

and more importantly, increase in bank's rural network. Another interesting point to note is

that the increase in coverage is driven by reduction in branches and increase in mobileunits. This indicates focus on low cost/profitable business model. This makes us believe

in the sustenance and increase in rural penetration of banks.

Direct correlation of farm income and

tractor demand

Higher focus on low cost models to

increase finance penetration


18/51


19/51


Auto Sector

19

-

5

10

15

20

25

FY95

FY97

FY99

FY01

FY03

FY05

FY07

FY09

FY11

> 2K >5K >10K

per 1000 people

-

20

40

60

80

FY95

FY97

FY99

FY01

FY03

FY05

FY07

FY09

FY11

> 10K > 50K > 100K

per 1000 people

0

50

100

150200

250

300

350

FY95 FY00 FY05 FY10 FY11 FY15

Rural Pentration Urban Penetrat ion Total

(per 1000 people)Penetration still below FY05 levels

despite strong vol. CAGR of ~15%

Passenger vehicles

Penetration levels continue to remain low

Penetration levels based on income or geography continue to remain low. More importantly,

penetration in the key income group (> Rs 200,000) is below FY05 levels. This is despite

a strong 15% CAGR growth during FY05-FY11 period. We attribute this to a much faster

increase in the population of key income group due to higher earnings. This is one of the

key reasons why we believe that the Indian passenger vehicle industry can be 4.9mn

units by 2015. (Refer to report Acceleration begins dated Jun10). Our analysis of

geographical spread also confirms our view that the envisaged demand explosion is yet

to occur owing to the inability of the OEMs to reach the interiors of the country.

Source: Census, Emkay Research

PV penetration for income group >Rs 0.2mn

Note: >10K constitutes ~97%, 50K to 100K- ~10% and >100K- ~69% of total

urban populationSource: Census, Emkay Research

Penetration - Urban - based on town size

Note: >2K constitutes ~54%, 5K to 10K- ~13% and >10K- ~49% of total rural

populationSource: Census, Emkay Research

Penetration - Rural - based on village size

Multiplier effect

Our analysis of historical data indicates that the elasticity/multiplier effect on demand has

increased over a period of time. We have used 5 year rolling CAGR to GDP and GDP (ex

Agri). Just as was the case with M&HCVs and tractors, both the 5 year as well as 3 year

multiplier for PVs has been on an uptrend. We attribute this to higher income generation

in rural/semi urban areas over the last 5 years. This fact is corroborated by our analysis on

penetration (> 200,000 income group) as well as geographical spread, as mentioned

above.

Growth in key income group has

outpaced car demand in the past 5years


20/51


Auto Sector

20

(1.0)

(0.5)

-

0.51.0

1.5

2.0

2.5

3.0

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Vols/GDP Vols/GDP(ex-Agri)Trend(Vols/GDP) Trend(Vols/GDPex-Agri)

0.5

1.0

1.5

2.0

2.5

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Vols/GDP Vols./GDP(ex-agri)

Trend(Vols/GDP) Trend(Vols/GDPex-Agri)

4%

6%

8%

10%12%

14%

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

-20%-10%0%10%20%30%40%50%

60%70%

1 yr deposit (LHS) Cars (YoY)

5%6%7%

8%9%

10%11%12%13%

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

20

09

-10

20

10

-11

60

65

70

75

80

85

90


5%7%

9%

11%

13%

15%

200

4-

05

200

5-

06

2006

-07

2007

-08

2008

-0

9

2009

-1

0

201

0-

11

0.00.5

1.0

1.5

2.0

2.5

Units (mn RHS) Avg Loan Rate (%)


5 Yr multiplier effect on car demand


3 Yr multiplier effect on car demand

Correlation with interest rate

Historically, there has been little correlation between rising interest rate and its impact on

demand. During FY09, we saw a sharp slowdown in demand due to higher interest rates.

However, this period coincided with the global recession. More importantly, the demand

bounced back with a vigor from mid FY10. It also pertinent to note that during FY09,

penetration of finance had reduced, which also affected the demand, given the fact that

there was ~65% penetration of finance during FY09.

Source: Industry, Emkay Research

Limited impact of rising interest rates


Finance availability playing a larger role


Correlation between interest rates and demand since 1994 - no major correlation

Penetration of finance reduced to

~65% in FY09


21/51


Auto Sector

21

Fuel price and demand

Contrary to perception, rise in fuel prices have failed to impact demand for cars. As can be

seen from the graphs below, both petrol and diesel prices have been on the rise and so

has been the demand for vehicles, as reflected by YoY change in monthly car sales.


Petrol price impact on car volumes


Diesel price impact on car volumes

More important is the correlation with wealth creation

There is a direct correlation between change in equity markets/real estate markets and

demand for cars. This is despite a steady income generation amongst the target audience.

We attribute this to psychological issues as people tend to postpone discretionary spends

during periods of crisis. Given India's high savings rate, demand generally bounces back

with vigor.


Wealth creation sentimentally affects demand


Strong correlation between performance of Sensex and demand

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Jun-02

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

30

40

50

60

70

80

Cars (% YoY) Petrol Pr ice (RHS)

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Jun-02

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

20

25

30

35

40

45

50

Cars (% YoY) Diesel Pr ice (RHS)

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Jan-05

May-05

Sep-05

Jan-06

May-06

Sep-06

Jan-07

May-07

Sep-07

Jan-08

May-08

Sep-08

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

Real estate index (MMR) Cars volumes Sensex

-60%

-40%

-20%

0%

20%

40%

60%

80%

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

Jun-11

Car Vols (% YoY) Sensex (% YoY)

Wealth creation more important than

interest rates


22/51


Auto Sector

22

50

100

150

200

250

300


Rural Urban Total

Per 1000 persons

0

50

100

150

200

250


Rural Urban Total

Per 1000 persons

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11E

0%

5%

10%

15%

20%

25%

30%

35%

% Chng in Employment (bps) Car Vols (% YoY RHS)

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11E

0%

5%

10%

15%

20%

25%

30%

35%

% Employment (YoY) Car Vols (% YoY RHS)

.and employment generation

As can be seen from the graph below, there exists a direct correlation between employment

generation and demand (especially growth rate). More importantly, we have not seen

growth rate going below 10% in the years, when there is employment generation.

Source: Ma Foi Survey, Emkay Research

Employment generation strongly affects demand

Source: Ma Foi Survey, Emkay Research

Improvement in employment growth drives demand

Two wheelers

Penetration continues to remain low

The penetration of two wheelers continues to remain low. More importantly, the

geographical reach of OEMs is also very low. This is evident from the wide disparity in

penetration of two wheelers in rural areas with population of > 2000 (200 per 1000) and >

than 5000 (500 per 1000). Similarly, the penetration in the urban areas is also hovering at

~200 per 1000 or below. This indicates the opportunity size of the demand for two wheelers.

The villages in the range of 2000 to 5000 people account for ~32% of rural population.

Note: >10K constitutes ~97% and 10K to 50K- ~19% of total urban populationSource: Census, Emkay Research

Penetration - Urban - based on town size

Note: >2K constitutes ~54% and 2K to 5K- ~32% of total rural populationSource: Census, Emkay Research

Penetration - Rural - based on village size

Penetration per 1000 persons Penetration for people earning > Rs 90,000 p.a.

-

50

100

150

200

250

F

Y95

F

Y97

F

Y99

F

Y01

F

Y03

F

Y05

F

Y07

F

Y09

F

Y11

>10K >50K Total

-

100

200

300

400

500

FY95

FY97

FY99

FY01

FY03

FY05

FY07

FY09

FY11

>2k >5K Total


23/51


Auto Sector

23

0.5

1.0

1.5

2.0

2.5

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Vols/GDP Vols/GDP(ex-Agri)

Trend (Vols/GDP) Trend (Vols/GDP exAgri)

0.5

1.0

1.5

2.0

2.5

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Vols/GDP Vols/GDP(ex-Agri)

Trend (Vols/GDP) Trend (Vols/GDPexAgri)

10%12%

14%16%18%20%

22%24%

200

4-

05

2005

-06

2006

-07

200

7-

08

2008

-09

2009

-10

201

0-

11

20%

24%

28%

32%

36%

40%


-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2004

-05

2005

-06

2006

-07

20

07

-0

8

2008

-09

2009

-10

2010

-11

10%

12%

14%

16%

18%

20%

22%

24%

Volumes (% YoY) Avg Loan Rate (% RHS)

Multiplier

Unlike four wheelers, the multiplier impact has been constant to declining over the years.

However, we believe that its future growth has the potential to surpass historical trends

due to a number of factors like - increased government focus of on rural/agri economy

(given the penetration of two wheelers in rural economy is similar to that of urban economy),

lower dependence on finance and rising women population owning a two wheeler. Also,the long term trends are subdued due to their disappointing performance during FY06-

FY08 period, where industry was passing through a tough phase due to systemic issues

of bad debts.


5 Yr multiplier effect on two wheeler demand


3 Yr multiplier effect on two wheeler demand

Interest rate and availability of finance

This is one of the structural reasons that make us believe that demand for two wheelers

can be higher than the historical long term averages. The fact that reliance on finance to

buy two wheelers is at its lowest, gives us the confidence that there is real strength in

demand (demand pull). Good improvement in the income of the target populations gives

us further confidence.


Demand strong despite highest loan rates .


and lowest finance penetration amongst segments

Rural income fast catching up

High rural demand for two wheeler (35% to 50% of total sales), faster increase in rural per

capita GDP and low penetration are other important factors that will drive two wheeler

demand faster than the historical trend line. Also, increasing awareness/exposure to

various trends, higher young working age population, increasing women consumers and

higher rural income will provide support to demand.

Lower penetration of finance indicates

structural demand


24/51


Auto Sector

24

0

200

400

600

800

1000

1200

FY92

FY94

FY96

FY98

FY00

FY02

FY04

FY06

FY08

FY10

FY12

MSP Rice (Rs per Quin) MSP Wheat (Rs per Quin)


Rural income catching up with urban levels


Higher MSP of crops aiding income growth

Wealth effect is not so clear

Unlike passenger vehicles, there is no clear relationship between two wheeler demand

and real estate prices or movement in Sensex. This can be attributed to low ticket size and

also the rural population's limited exposure to stock markets/real estate markets.

Source: Blooberg, Liases Foras, Emkay Research

Wealth effect not so pronounced


Demand not strongly correlated with Sensex

2.5

3

3.5

FY94 FY00 FY06 FY09 FY10

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Jan-05

M

ay-05

S

ep-05

Jan-06

M

ay-06

S

ep-06

Jan-07

M

ay-07

S

ep-07

Jan-08

M

ay-08

S

ep-08

Jan-09

M

ay-09

S

ep-09

Jan-10

M

ay-10

S

ep-10

Jan-11

Real estate index (MMR) 2 Whlr Vols Sensex

-60%

-40%

-20%

0%

20%

40%

60%

80%

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

Jun-11

2 w h V ols (% Y oY ) Sensex (% Y oY)


25/51


Auto Sector

25

Companies

Ashok Leyland

Bajaj Auto

Eicher Motors

Hero MotoCorp

Mahindra & Mahindra

Maruti Suzuki India

Tata Motors

TVS Motor


26/51

Y/E, Mar Net EBIDTA EBIDTA APAT EPS EPS RoE P/E EV / P/BV

(Rs mn) Sales (Core) (%) (Rs) % chg (%) (x) EBITDA (x)

FY10 72,447 7,628 10.5 3,889 1.5 112.9 17.6 17.6 10.8 3.0

FY11 111,177 12,436 11.2 6,573 2.5 69.0 26.4 10.4 6.4 2.6

FY12E 122,040 12,965 10.6 6,058 2.3 (7.8) 21.6 11.3 5.8 2.3

FY13E 138,777 14,868 10.7 7,544 2.8 24.5 23.9 9.1 4.8 2.0


Financial Snapshot

Emkayour success is our success

Ashok Leyland

Negatives factored in

Com

panyUpdate

mkay Global Financial Services Ltd.

eco Previous Recoccumulate Accumulate

MP Target Prices26 Rs29

PS change FY12E/13E (%) -

rget price change (%) -

fty 5,017

ensex 16,862

rice Performance

%) 1M 3M 6M 12M

bsolute 6 2 2 -30

el. to Nifty 8 11 9 -24

ource: Bloomberg

elative price chart

September, 2011

ource: Bloomberg

tock detailsector Automobiles

oomberg AL IB

quity Capital (Rs mn) 2,661

ace Value(Rs) 1

o of shares o/s (mn) 2,661

Week H/L 41/ 23

arket Cap (Rs bn/USD mn) 67/ 1,447

aily Avg Volume (No of sh) 8,265,926

aily Avg Turnover (US$mn) 4.5

hareholding Pattern (%)

Jun11 Mar11 Dec10omoters 38.6 38.6 38.6

/NRI 27.0 26.6 28.3

stitutions 16.6 16.9 16.5

ivate Corp 5.9 6.8 5.7

ublic 12.0 11.1 10.9

ource: Capitaline

Volumes - worst is behind; Expect sequential improvement in

market share as 1QFY12 was affected by regional issues

Exports have been gaining traction. Expect export volumes to

surprise positively. Ramp up in Pantnagar production tocushion margins

Contribution from various JVs to be visible in FY13. Nissan JV

to be margin accretive

Valuation attractive as focus has shifted to near term

earnings. Retain Accumulate

Volume growth to pick up

AL witnessed a sharp drop in volumes in 1QFY12 due to ongoing elections in certain

southern states and sluggish mining activities. Overall industry reported 7% volume

growth for 1QFY12. Management expects pick up in mining activities and positive industrygrowth despite a high base (emission norms impact). We believe that the worst is over for

Ashok Leyland and expect it to benefit from up tick in industry demand leading to ~9%

CAGR during FY11-13E.

Exports- can be the next big volume driver

Over the years, exports for the company have been gaining traction. It should be noted that

the company intends to be amongst the top 10 global M&HCV manufacturers (FY11

Annual report). We believe that exports can provide the required cushion to market share

pressures in the domestic market and lead to ~8% volume CAGR over FY11-13E.

Focus on diversifying the revenue stream

We believe that management has realized the potential risk of higher competition in theM&HCV space. As a result, it is taking steps to reduce its dependence on the cyclical

M&HCV business by diversifying the revenue stream to encompass (1) exports (2) entry in

to LCVs (3) defense and engine sales. We expect the company to benefit from these in the

long term. AL plans to commence LCV manufacturing activity at its Hosur plant which will

be margin accretive in our view.

Higher Pantnagar contribution to cushion margins

Management has guided for a production target of 36,000-40,000 units in FY12 at the tax

free Pantnagar plant. Considering the Q1FY12 production from Pantnagar at 6,000 units,

we expect the annual production for FY12 at ~30,000 units.

ValuationsAt Rs 26, the stock trades at FY13E PER/EV-EBIDTA of 9.1x/4.8x. We view AL as a cyclical

stock and believe the earnings based valuations are misleading due to inability to forecast

the cycles (upturn/downturn). We prefer to focus on other lead indicators like P/BV, which

we find attractive. For AL, we found dividend yield as the most important lead indicator

(refer to our note titled - 'Focus on lead indicators'). We retain our ACCUMULATE rating on

the stock.

p-10 Nov-10 Jan-11 Mar-11 May- 11 Jul- 11

Rs

-40

-32

-24

-16

-8

0%

Asho k Leyla nd (LHS) R el to Ni fty (RHS)


27/51


Auto Sector

27

0

5

10

15

20

25

30

35

Q1FY08

Q2FY08

Q3FY08

Q4FY08

Q1FY09

Q2FY09

Q3FY09

Q4FY09

Q1FY10

Q2FY10

Q3FY10

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

0%

2%

4%

6%

8%

10%

12%

14%

Overall vols. ('000 units) EBITDA Margin (% RHS)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

F

Y06

F

Y07

F

Y08

F

Y09

F

Y10

F

Y11

FY

12E

FY

13E

30%

40%

50%

60%

70%

80%

DPS Div. Payout (RHS)

012345678

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

6%

11%

16%

21%

26%

31%

36%

Pantnagar prod. ('000 units) % of sales (RHS)

4

6

8

10

12

14

FY06

FY07

FY08

FY09

FY10

FY11

FY12E

FY13E

6%

7%

8%

9%

10%

11%

12%

13%

Exports ( '000 units) % of total vols (RHS)

20

40

60

80

100

120

FY06

FY07

FY08

FY09

FY10

FY11

FY12E

FY13E

-60%

-40%

-20%

0%

20%

40%

60%

Trucks ('000 units) Bus ('000 units)

Trucks % YoY (RHS) Bus % YoY (RHS)

0%

10%20%

30%

40%

50%

60%

Q1FY08

Q2FY08

Q3FY08

Q4FY08

Q1FY09

Q2FY09

Q3FY09

Q4FY09

Q1FY10

Q2FY10

Q3FY10

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

Trucks Bus

Source: Company, Emkay Research

Dividend yield at ~4% acts as inflexion point for the stock


DPS has remained stable/increased even during slowdown


M&HCVs - domestic market share


Overall M&HCV market share bottoming out


Product mix - Trucks to drive volumes


Exports - on an uptick


Pantnagar - higher output to support margins


Margins - high sensitivity to volumes

0

510

15

20

25

30

Q1FY08

Q2FY08

Q3FY08

Q4FY08

Q1FY09

Q2FY09

Q3FY09

Q4FY09

Q1FY10

Q2FY10

Q3FY10

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Q1FY12

6%

11%16%

21%

26%

31%

36%

Domestic M&HCV ('000 units) Mkt Share (% RHS)

Ashok Leyland

0

2

4

6

8

10

Nov-05

Mar-06

Jul-06

Nov-06

Mar-07

Jul-07

Nov-07

Mar-08

Jul-08

Nov-08

Mar-09

Jul-09

Nov-09

Mar-10

Jul-10

Nov-10

Mar-11

Jul-11

0

10

20

30

40

Div. Y ield (%) Share Price (RHS)

Div. Yield (%)

recessionary period

(Rs)


28/51


Auto Sector

28

Key Financials

Income Statement (Rs. Mn)

Y/E Mar (Rsmn) FY10 FY11 FY12E FY13E

Net Sales 72,447 111,177 122,040 138,777

Growth (%) 21.1 53.5 9.8 13.7

Expenditure 64,819 98,742 109,075 123,908Materials Consumed 52,193 81,235 88,948 101,094

Employee Cost 6,716 9,486 11,012 12,488

Other Exp 5,909 8,021 9,114 10,326

EBITDA 7,628 12,436 12,965 14,868

Growth (%) 62.5 63.0 4.3 14.7

EBITDA margin (%) 10.5 11.2 10.6 10.7

Depreciation 2,041 2,674 3,411 3,591

EBIT 5,587 9,761 9,554 11,277

EBIT margin (%) 7.7 8.8 7.8 8.1

Other Income 209 153 277 364

Interest expenses 811 1,637 2,063 1,843

PBT 4,985 8,278 7,767 9,797

Tax 1,097 1,705 1,709 2,253Effective tax rate (%) 22.0 20.6 22.0 23.0

Adjusted PAT 3,889 6,573 6,058 7,544

Growth (%) 112.9 69.0 (7.8) 24.5

Net Margin (%) 5.4 5.9 5.0 5.4

(Profit)/loss from JVs/Ass/MI - - - -

Adj. PAT After JVs/Ass/MI 3,889 6,573 6,058 7,544

E/O items 348 (260) - -

Reported PAT 4,237 6,313 6,058 7,544

Growth (%) 123.0 49.0 (4.0) 24.5

Balance Sheet (Rs. Mn)


Equity share capital 1,330 1,330 1,330 1,330

Reserves & surplus 35,233 38,299 41,390 45,239

Net worth 36,563 39,630 42,720 46,569Minority Interest

Secured Loans 7,116 11,823 9,423 8,023

Unsecured Loans 14,923 13,860 17,660 17,460

Loan Funds 22,039 25,683 27,083 25,483

Net deferred tax liability 4,611 5,338 5,338 5,338

Total Liabilities 63,213 70,650 75,141 77,390

Gross Block

Less: Depreciation 60,186 66,919 69,919 72,919

Net block 17,691 20,581 23,992 27,584

Capital work in progress 42,496 46,338 45,927 45,335

Investment 5,615 3,580 3,580 3,580

Current Assets 3,262 12,300 17,800 19,200

Inventories 41,397 43,672 43,777 50,118Sundry debtors 16,382 22,089 18,171 20,664

Cash & bank balance 10,221 11,852 10,176 11,572

Loans & advances 5,189 1,795 2,165 2,799

Other current assets 9,605 7,936 13,265 15,084

Current lia & Prov 29,608 35,283 35,985 40,886

Current liabilities 25,921 30,379 29,883 33,947

Provisions 3,687 4,903 6,102 6,939

Net current assets 11,789 8,390 7,792 9,232

Misc. exp 51.7 43.1 43.1 43.1

Total Assets 63,213 70,650 75,141 77,390

Key Ratios

Y/E Mar FY10 FY11 FY12E FY13E

Profitability (%)

EBITDA Margin 10.5 11.2 10.6 10.7

Net Margin 5.4 5.9 5.0 5.4

ROCE* 12.5 18.5 16.4 18.4

ROE* 17.6 26.4 21.6 23.9

RoIC* 17.1 25.8 24.4 29.2

Per Share Data (Rs)

EPS 1.5 2.5 2.3 2.8

CEPS 2.2 3.5 3.6 4.2

BVPS* 8.7 10.0 11.1 12.6DPS 0.7 1.0 1.0 1.2

Valuations (x)

PER 17.6 10.4 11.3 9.1

P/CEPS 11.6 7.4 7.2 6.2

P/BV* 3.0 2.6 2.3 2.0

EV / Sales 1.1 0.7 0.6 0.5

EV / EBITDA 10.8 6.4 5.8 4.8

Dividend Yield (%) 2.9 3.9 3.7 4.6

Gearing Ratio (x)

Net Debt/ Equity* 0.7 0.9 0.8 0.6

Net Debt/EBIDTA 2.1 1.8 1.8 1.4

Working Cap Cycle (days) 3.4 11.7 (4.6) (4.5)

Cash Flow (Rs. Mn)


PBT (Ex-Other income) 4,776 8,125 7,490 9,434

Depreciation 2,041 2,674 3,411 3,591

Interest Provided 811 1,637 2,063 1,843

Other Non-Cash items 1,564 (4,822) - -

Chg in working cap 2,806 6 967 (806)

Tax paid (1,097) (1,705) (1,709) (2,253)

Operating Cashflow 10,902 5,914 12,224 11,809

Capital expenditure (6,429) (4,697) (3,000) (3,000)

Free Cash Flow 4,473 1,216 9,224 8,809

Other income 209 153 277 364Investments (1,612) (4,633) (5,500) (1,400)

Investing Cashflow (1,403) (4,480) (5,223) (1,036)

Equity Capital Raised - - - -

Loans Taken / (Repaid) 2,457 3,644 1,400 (1,600)

Interest Paid (811) (1,637) (2,063) (1,843)

Dividend paid (incl tax) (2,327) (3,092) (2,968) (3,695)

Income from investments

Others 1,914 949

Financing Cashflow 1,233 (136) (3,631) (7,139)

Net chg in cash 4,303 (3,400) 369 634

Opening cash position 851 5,189 1,795 2,165

Closing cash position 5,155 1,789 2,165 2,799


Ashok Leyland

* ex revaluation reserve


29/51



FY10 118,637 25,353 21.4 18,651 64.5 116.5 73.8 25.5 17.7 16.3

FY11 165,148 33,178 20.1 26,422 91.3 41.7 85.2 18.0 12.8 9.7

FY12E 195,075 35,857 18.4 28,674 99.1 8.5 51.3 16.6 11.4 7.6

FY13E 225,573 41,164 18.2 33,184 114.7 15.7 46.9 14.3 9.6 6.1


Financial Snapshot


Bajaj Auto

New launches, exports to drive growth

Com

panyUpdate


eco Previous Recoccumulate Buy

MP Target Prices1,668 Rs1,950

PS change FY12E/13E (%) 2.4%/2.3%

rget price change (%) 16%

fty 5,017

ensex 16,862

rice Performance

%) 1M 3M 6M 12M

bsolute 17 21 20 9

el. to Nifty 19 32 29 20

ource: Bloomberg

elative price chart

September, 2011 Focus on demand pull to ensure market share gains with

strong profitability. 1QFY12 domestic motorcycle market share

at ~25% is below its FY07 peak of ~32%

Factored DEPB withdrawal in our estimates. Extension of thescheme to result in EPS upgrade of ~7%. Expect exports to

remain the key growth driver irrespective of DEPB

Raised our FY12/FY13 EPS est. by 2.4% /2.3% to Rs 99/Rs 115.

Raise TP to Rs 1,950 valuing the company at 17x FY13 PE

(earlier 15x) due to high FCF, return ratios and dividend

However, lower our rating to ACCUMULATE from BUY. We

believe there is limited scope for valuation rerating from

hereon. Stock performance will be driven by earnings

Traction in volumes with focus on profitability

We expect Bajaj Auto to register volume growth of 15.5% CAGR over FY11-13E to 5mn

units driven by (1) launch of new products/variants within its umbrella brands (Discover

and Pulsar) (2) introduction of Boxer in the domestic market (3) sustained momentum in

domestic 3-wheelers at ~12% CAGR to 0.26mn units and (4) ~19% CAGR in exports to

1.7mn units (with an upward bias).

Market share assumptions for motorcycles leave room for upsides

We are not factoring in market share gain for the company during FY11-FY13E post the

500bps increase over the last two years to 27% (FY11). We would like to highlight that

company has not yet regained its peak motorcycle market share of 32% (FY07). Given the

absolute focus on two mother brands (Discover and Pulsar) and pull demand, there exist

upsides to our market share estimates. We would prefer to see the traction in recent/

expected launches and addition of 130 dealers before factoring in the same.

Focus on profitability to aid market share gain in the long term

A clear shift in strategy towards profitability/margins vis--vis market share should actually

aid BJAUT gain market share in the domestic two wheeler industry in the long term. This

is on account of the company focusing on all aspects of product success - customer

preference, maintenance cost, after sales, quality of dealership and customer satisfaction.

Factoring in DEPB withdrawal but upside from currency exists

Post 4QFY11 earnings, we have lowered the export incentives for the company from ~10%

to 5% of exports to factor in the risk of withdrawal of the scheme. Any extension in the

scheme will result in an EPS upgrade by ~7%. Exports will continue to be key growth

driver, irrespective of DEPB benefits.

Valuation and view

We expect earnings to register a ~12% CAGR during FY11-FY13E, with a strong case for

upward bias. We have revised our FY12/FY13 EPS estimates by 2.4%/2.3% to Rs 99/Rs

115 driven by volumes. We have raised our TP to Rs 1,950 valuing the company at FY13

PER/EV-EBIDTA of 17x/11.7x, given the high FCF, return ratios and dividend. However, we

lower our rating to ACCUMUATE from BUY. From here, we believe that there is limited

scope for rerating of valuations. Stock performance will be driven by volumes/earnings.

00

95

90

85

80

75

Sep-10 Nov -10 Jan-11 Mar -11 May -11 Jul-11

Rs

-20

-10

0

10

20

30%

Bajaj Auto (LHS) Relto Nifty (RHS)

ource: Bloomberg


oomberg BJAUT IB

quity Capital (Rs mn) 2,894

ace Value(Rs) 10

o of shares o/s (mn) 289

Week H/L 1,665/ 1,190

arket Cap (Rs bn/USD mn) 455/ 9,869

aily Avg Volume (No of sh) 428.700



Jun11 Mar11 Dec10omoters 50.0 50.0 49.7

/NRI 15.9 16.1 17.9



ublic 17.4 17.4 17.6

ource: Capitaline


30/51


31/51


Auto Sector

31

Key Financials

Income Statement (Rs. Mn)


Net Sales 118,637 165,148 195,075 225,573

Growth (%) 35.5 39.2 18.1 15.6

Expenditure 93,284 131,970 159,217 184,409Materials Consumed 80,704 117,988 142,359 164,999

Employee Cost 3,995 4,648 5,584 6,596

Other Exp 8,585 9,334 11,275 12,815

EBITDA 25,353 33,178 35,857 41,164

Growth (%) 122.9 30.9 8.1 14.8

EBITDA margin (%) 21.4 20.1 18.4 18.2

Depreciation 1,365 1,228 1,363 1,410

EBIT 23,989 31,950 34,495 39,753

EBIT margin (%) 20.2 19.3 17.7 17.6

Other Income 1,798 4,599 4,522 6,275

Interest expenses 60 17 5 3

PBT 25,726 36,532 39,012 46,025

Tax 7,075 10,110 10,338 12,841Effective tax rate (%) 27.5 27.7 26.5 27.9

Adjusted PAT 18,651 26,422 28,674 33,184

Growth (%) 116.5 41.7 8.5 15.7

Net Margin (%) 15.7 16.0 14.7 14.7

(Profit)/loss from JVs/Ass/MI - - - -

Adj PAT After JVs/Ass/MI 18,651 26,422 28,674 33,184

E/O items (1,615) 6,976 - -

Reported PAT 17,036 33,397 28,674 33,184

Growth (%) 159.5 96.0 (14.1) 15.7

Balance Sheet (Rs. Mn)


Equity share capital 1,447 2,894 2,894 2,894

Reserves & surplus 27,837 46,209 59,886 75,714

Net worth 29,283 49,102 62,779 78,608Minority Interest - - - -

Secured Loans 130 235 235 235

Unsecured Loans 13,256 3,016 2,252 1,252

Loan Funds 13,386 3,252 2,487 1,487

Net deferred tax liability 17 297 297 297

Total Liabilities 42,686 52,651 65,563 80,392

Gross Block 33,793 33,952 35,902 38,158

Less: Depreciation 18,997 19,125 20,487 21,897

Net block 14,796 14,827 15,415 16,261

Capital work in progress 415 699 699 699

Investment 40,215 47,952 61,952 76,952

Current Assets 15,838 28,726 36,312 40,403

Inventories 4,462 5,473 6,578 7,587Sundry debtors 2,728 3,628 4,360 5,029

Cash & bank balance 1,014 5,565 6,927 6,845

Loans & advances 6,574 11,896 16,282 18,778

Other current assets 1,060 2,164 2,164 2,164

Current lia & Prov 28,579 39,553 48,815 53,922

Current liabilities 20,263 24,267 30,535 32,840

Provisions 8,316 15,286 18,280 21,082

Net current assets (12,740) (10,827) (12,502) (13,519)

Misc. exp - - - -

Total Assets 42,686 52,651 65,563 80,392

Key Ratios

Y/E Mar FY10 FY11 FY12E FY13E

Profitability (%)

EBITDA Margin 21.4 20.1 18.4 18.2

Net Margin 15.7 16.0 14.7 14.7

ROCE 68.5 76.7 66.0 63.1

ROE 73.8 85.2 51.3 46.9

RoIC 343.4(12,215.6) (1,236.5) (979.4)

Per Share Data (Rs)

EPS 64.5 91.3 99.1 114.7

CEPS 69.2 95.6 103.8 119.6

BVPS 101.2 169.7 217.0 271.7DPS 20.0 40.0 44.6 51.6

Valuations (x)

PER 25.5 18.0 16.6 14.3

P/CEPS 23.8 17.2 15.8 13.8

P/BV 16.3 9.7 7.6 6.1

EV / Sales 4.0 2.8 2.3 1.9

EV / EBITDA 17.7 12.8 11.4 9.6

Dividend Yield (%) 1.2 2.4 2.7 3.1

Gearing Ratio (x)

Net Debt/ Equity (0.7) (0.8) (0.9) (0.9)

Net Debt/EBIDTA 0.0 (0.4) (1.0) (1.0)

Working Cap Cycle (days) (40.2) (33.5) (36.7) (32.7)

Cash Flow (Rs. Mn)


PBT (Ex-Other income) 23,929 31,933 34,490 39,750

Depreciation 1,365 1,228 1,363 1,410

Interest Provided 60 17 5 3

Other Non-Cash items (2,170) (5,568) - -

Chg in working cap 11,263 2,638 3,038 934

Tax paid (7,075) (10,110) (10,338) (12,841)

Operating Cashflow 27,371 20,137 28,557 29,257

Capital expenditure (485) (443) (1,951) (2,256)

Free Cash Flow 26,886 19,695 26,607 27,001

Other income 1,798 4,599 4,522 6,275Investments (22,949) (15,123) (14,000) (15,000)

Investing Cashflow (21,151) (10,524) (9,478) (8,725)

Equity Capital Raised - 1,447 - -

Loans Taken / (Repaid) (2,314) (10,134) (765) (1,000)

Interest Paid (60) (17) (5) (3)

Dividend paid (incl tax) (6,749) (13,452) (14,996) (17,355)

Income from investments

Others 3,033 13,537

Financing Cashflow (6,090) (8,620) (15,766) (18,358)

Net chg in cash (355) 551 1,363 (82)

Opening cash position 1,369 1,014 5,565 6,927

Closing cash position 1,014 1,565 6,927 6,845


Bajaj Auto


32/51



CY09 29,386 1,455 4.9 844 31.3 (746.0) 7.8 43.4 18.0 3.4

CY10 43,971 3,578 8.1 1,899 70.5 124.9 16.5 19.3 12.4 3.0

CY11E 53,341 5,189 9.7 2,792 103.7 47.1 20.9 13.1 7.9 2.5

CY12E 64,821 6,388 9.9 3,255 120.8 16.6 20.8 11.3 5.9 2.2


Financial Snapshot (Consolidated)


Eicher Motors

Market share gain to continue, Retain BUY

Com

panyUpdate


eco Previous Recouy Buy

MP Target Prices1,362 Rs1,700

PS change FY12E/13E (%) -

rget price change (%) -

fty 5,017

ensex 16,862

rice Performance

%) 1M 3M 6M 12M

bsolute 2 3 29 8

el. to Nifty 3 12 39 19

ource: Bloomberg

elative price chart

September, 2011

ource: Bloomberg


oomberg EIM@IN

quity Capital (Rs mn) 270

ace Value(Rs) 10

o of shares o/s (mn) 27

Week H/L 1,450/975

arket Cap (Rs bn/USD mn) 36/813

ai ly Avg Volume (No of sh) 18,414



Jun-11 Mar-11 Dec-10omoters 55.3 55.3 55.3

/NRI 15.1 14.4 18.2



ublic 11.1 11.4 11.5

ource: Capitaline

CV volumes to surprise positively driven by higher demand for

7.5-12ton segment during a slowdown and its success in 12-

16ton segment (highest ever market share)

Well poised to deliver strong growth in higher tonnagesegment due to support from Volvo and strong balance sheet

Motorcycle business in a sweet spot as demand remains

strong; Clear focus to ensure swift capacity expansion and

higher profitability

Retain BUY with a TP of Rs 1,700 on SOTP basis. Valued

existing business at Rs 1,547 and engine business at Rs 153.

Key risk - sharp downturn in CV demand

7.5 to 12 ton M&HCVs outperform during slowdown, EIM-thebeneficiary

During a cyclical slowdown, ICVs tend to gain market share and during a cyclical upturn,

HCVs gain market share. This is a normal phenomenon as during slowdown there are

concerns of asset utilization and hence, preference shifts to ICVs. This is one of the key

reasons for our positive view towards Eicher (EIM), as 7.5 to 12 ton accounts for ~65% of

EIM's truck volumes.

12 to 16 ton - market share has crossed the previous peak of 6%

EIM's market share in the 12 to 16 ton segment has crossed the previous peak of ~6%. It

currently stands at ~7%. Also, this segment now accounts for 11% of EIM's truck volumes

and ~8% of EIM's total CV volumes. More importantly, EIM is focusing on creating brand

awareness for its 25 ton and 31 ton vehicles, so that it can participate when the demand

enters the cyclical upturn phase.

Two wheeler business - should benefit from clear focus

EIM's two wheeler (Royal Enfield) business is an underutilized business with lower

capacities and margins of ~13% despite the strong brand equity. Clear focus on the

business will ensure swift capacity additions and higher margins.

Engine business - a strong outsourcing opportunity and a stablebusiness

Engine manufacturing to commence from CY13 will not only provide support to EIM's

existing business but will also ensure a stable outsourcing business to Volvo. Initial

capacity planned is for 85,000 units that will manufacture engine from Euro II to Euro VII

and meet the requirements of EIM as well as Volvo (India/Japan/Europe)

Valuation & View

At CMP of Rs 1,361, the stock trades at PER of 13.1x/11.3x and EV/EBIDTA of 7.9x / 5.9x our

CY11 and CY12 estimates respectively. We retain BUY rating on the stock with a target

price of Rs 1,700 based on SOTP. We value the current business at Rs 1,547 and NPV of

engine business at Rs 153.

00

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Auto Sector

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5-7.5Ton 7.5 - 12 ton

Product Mix

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auto sector report_cruising through barriers

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