hmcl industry motogaze march 2018 bal sector view...

ICICI Securities Ltd. | Retail Equity Research

March 28, 2018

MotoGaze March 2018

s

Two-wheelers drive overall volumes!

Overall auto volumes continued their strong growth momentum (primarily

on account of low base), up 23.2% YoY for February 2018. All segments

reported healthy volume growth. The 2-W segment (that accounts for

~79% of overall auto volumes) reported robust volume growth of 24.5%

YoY, thereby driving overall auto volumes. The growth of the segment

was driven by both scooter & motorcycle segment, which grew 24.6%,

26.8% YoY, respectively mainly on account of low base (demonetisation).

CV volumes grew 29% YoY. Growth was driven by the LCV segment (up

36.7% YoY) mainly due to increase in demand from e-commerce &

container and refrigerator vehicles. M&HCV segment grew 19.9% YoY

mainly after stricter implementation of overloading in some states and

revival in infrastructure development. The 3-W segment reported strong

growth of 78.9% YoY as domestic 3-W volume grew 76.7% YoY mainly

due to 1) discontinuance of permits in Maharashtra, 2) new permits

released in Delhi and 3) replacement of two-stroke to four-stroke engine in

Bengaluru. The 3-W exports also continued to witness a strong demand

revival with volumes up 83.3% YoY. The PV segment reported decent

volume growth of 6.1% YoY, primarily driven by MSIL, the market leader

in the space, which reported strong volume growth of 15% YoY. Domestic

tractor volumes grew 38.6% YoY to 47,807 units.

MSIL dominates PV space; Bolero enters top 10 PV lists

MSIL continues to dominate the PV industry. For February 2018, its six

models featured in the list of top 10 selling PVs in India. The new Swift has

received a good response from consumers. For February 2018, it clocked

volumes of 17,291 units. According to media reports, the new Swift has

crossed 100,000 bookings while its waiting period is more than eight

weeks. MSIL’s other models viz. Baleno & Brezza continue to post healthy

volume of 15,807 units & 11,620 units, respectively. Hyundai India’s three

models viz. Elite i20, Grand i10 & Creta also hold their place in the list of

top selling PVs in India. Further, M&M’s Bolero entered the highest selling

PV list at the tenth place and reported volume of 8,001 units. On a

YTDFY18 basis, Bolero has reported an exceptional performance in its UV

portfolio (volume up 25.8% YoY). In the 2-W space, Activa & Splendor are

top selling brands with volumes of 247,377 & 238,722 units, respectively.

Long term story intact

The higher focus on rural & infrastructure development in Budget 2018 will

favour the auto space. The auto industry weathered key structural events

like implementation of BS IV norms and GST, with its volumes recovering,

up 14.1% in YTDFY18. Overall 2-W, PV, CV volume growth was at 15.2%,

6.1% YoY, 14.9% YoY, respectively, in YTDFY18. We expect the strong

growth momentum to continue in FY19E (expect ~10% growth). The

government’s focus on the rural economy will aid the demand for 2-W

players in key under penetrated agrarian states. A buoyant outlook on

infrastructure spending & pre-buying ahead of BS VI migration is expected

to catalyse M&HCV growth.

For February 2018, the BSE Auto Index was down ~5% in line with the

benchmark index. The pace of electric vehicle (EV) adoption and BS-VI

implementation by 2020 is expected to lead to huge investments &

partnership in R&D. We believe the major OEMs business will adopt the

new technology smoothly. However, ancillary companies producing

internal combustion engine related parts are expected to face challenges.

The new technology can prove to be a threat to the incumbent in the

battery space, with new players and OEMs entering the space. In our I-

direct auto coverage, we remain bullish on frontline OEM stocks like

Maruti Suzuki and Eicher Motors.

Sector View

Overweight

Volume performance for February 2018

Company Gr. YoY(%)

Hero Motocorp 20.0

Bajaj Auto 30.8

TVS Motors 38.1

Maruti Suzuki 15.0

Tata Motors 34.0

Ashok Leyland 29.2

Mahindra and Mahindra 19.7

Key players & industry volume growth –February’18 (%)

0.5

-1.9

1.3

6.9

0.4

-1.0

-1.3

-1.8

-1.4

0.4

23.2

20.0

30.8

38.1

32.0

15.0

34.0

19.7

5.1

29.2

Industry

HMCL

BAL

TVS

HMSI

Maruti

TML

M&M

Hyundai

ALL

MoM

YoY

Source: Siam

Key players & industry volume growth YTDFY18 (%)

14.1

13.3

8.2

17.6

22.4

13.3

16.0

7.7

1.4

20.6

Industry

HMCL

BAL

TVS

HMSI

Maruti

TML

M&M

Hyundai

ALL

YTDFY18

Source: Siam

Research Analyst

Nishit Zota

[email protected]

Vidrum Mehta

[email protected]


Motorcycle, scooters both drive two wheeler volumes!

For February 2018, overall 2-W volumes grew 24.5% YoY, supported by

both motorcycle & scooter segments, which grew 24.6% & 26.8% YoY,

respectively. Overall 2-W domestic volumes grew 23.8% YoY while

exports volumes grew 29.8% YoY. In terms of players, the top two - HMCL

& HMSI reported strong volume growth of 20% YoY & 32% YoY,

respectively. The other 2-W players viz. TVS & BAL (third & fourth largest

player) reported volume growth of 36.9% YoY & 21.5% YoY, respectively.

The 3-W volumes grew 78.9%, supported by a revival in export volume

(up 83.3% YoY) and higher demand in domestic market (up 76.7% YoY),

mainly due to discontinuance of permits in Maharashtra, new permits

released in Delhi and replacement of two-stroke to four-stroke engine in

Bengaluru. Domestic tractor industry volumes grew 38.6% YoY to 47,807

units & 19.4% YoY to 638,191 units for February 2018 & YTDFY18,

respectively.

Market share movement

According to data released by the Society of Indian Automobile

Manufacturers (Siam), the domestic market share of two and three-

wheeler players as of February 2018 is mentioned below.

Exhibit 1: Domestic market share movement in two-wheelers

11.5

36.6

14.1

27.2

10.69.8

36.2

14.2

29.0

10.8

9.8

36.2

14.1

29.0

10.8

0

5

10

15

20

25

30

35

40

Bajaj Auto Hero MotoCorp TVS Motors HMSI Others

(%

)

Feb-17 Jan-18 Feb-18

Source: Siam, Data used is YTD

Exhibit 2: Domestic market share movement in three-wheelers

49.8

29.4

10.0

10.8

57.2

24.8

8.6

9.4

57.7

24.4

8.5

9.3

0 10 20 30 40 50 60 70

Bajaj Auto

Piaggio

M&M

Others

(%)



Overall 2-W segment volumes grew 24.5% YoY in February

2018. Over last year, HMSI has outperformed the 2-W industry

growth, thereby expanding its market share by 180 bps YoY to

29%. On the other hand, HMCL continues to enjoy a dominant

position with share of 36.2%. With the underperformance on a

YTDFY18 basis, BAL has lost market share of ~170 bps YoY to

9.8%

In February 2018, domestic 3W volumes grew 78.9% YoY,

mainly supported by market leader Bajaj Auto, which

reported strong volume growth of 116.1% YoY, thereby

gaining market share by 790 bps YoY to 57.7%


Exhibit 3: Domestic market share movement in motorcycles

18.2

50.9

7.0

14.315.7

51.3

7.3

15.715.8

51.2

7.2

15.7

0

10

20

30

40

50

60

70

Bajaj Auto Hero Motocorp TVS motor Honda

(%

)


Source: Company, ICICIdirect.com Research

Exhibit 4: Domestic market share movement in scooters/scooters

14.1 14.5

57.3

14.113.0

16.1

57.3

13.613.0

16.1

57.3

13.5

0

10

20

30

40

50

60

70

Hero Motocorp TVS Motors Honda Others

(%

)



Overall motorcycle volumes increased 26.8% YoY in

February 2018. HMCL continues to be the market leader in

the space with a share of ~51%

Overall scooter volumes grew 24.6% YoY in February 2018.

HMSI maintained its leadership position in scooters with

market share of ~57% YoY. TVS also reported strong growth

of 35.6% YoY; thereby expanding its market share by 160 bps

YoY to 16.1%


Exhibit 5: Market share movement in executive motorcycle (<125 cc) segment*

19.2

59.0

7.4

14.4

0

4

8

12

16

20

0

10

20

30

40

50

60

70

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-1

6

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

(%

)

(%

)

Bajaj Auto (RHS) Hero Motocorp (LHS) TVS (RHS) HMSI (RHS)

Source: Siam * only top four two-wheeler OEMs

Exhibit 6: Market share movement in motorcycle greater than 125 cc segment

55.4

3.7

20.8

20.1

0

4

8

12

16

20

24

28

0

10

20

30

40

50

60

70

80

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-1

6

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

(%

)

(%

)

Bajaj Auto (LHS) Hero Motocorp (RHS) TVS (RHS) HMSI (RHS)

Source: Siam *only top three vehicle two-wheeler OEMs

HMCL continues to dominate the executive motorcycle

segment (<=125 cc) in India with a market share of ~59%.

HMSI’s volumes have been more volatile thereby resulting in

wide fluctuation in its market share in the last 12 months

BAL continues to dominate the executive motorcycle

segment (<=125 cc) in India with market share at ~55%.

HMSI’s volumes have been more volatile thereby resulting in

wide fluctuation in its market share in the last 12 months


Hero MotoCorp (HERHON)

Hero MotoCorp’s (HMCL), the market leader in the 2-W space,

volume grew 20% YoY to 629,597 units. Its motorcycle & scooter

volume grew 21.1% YoY & 12.6% YoY, respectively

Its top selling model Splendor volume grew 16% YoY. HF Deluxe

& Glamour reported strong volume growth of 37.6% YoY & 67.3%

YoY, respectively. Among its scooter portfolio, volumes of

Maestro & Pleasure grew 12.4% YoY & 38.3% YoY, respectively,

while volumes of Duet declined 4% YoY

HMCL, to revive its focus on the growing premium motorcycle

segment, unveiled all new ‘Xtreme 200R’ and will be across

dealership from April 2018. The management expects HMCL to

maintain its strong growth trajectory, going forward

Exhibit 7: Volume performance (in units)

Segment Feb-18 Feb-17 %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg

Motorcycles 556,016 459,217 21.1 562,931 -1.2 6,029,302 5,297,588 13.8

Scooters 73,581 65,355 12.6 78,570 -6.3 827,394 756,507 9.4

Total Sales 629,597 524,572 20.0 641,501 -1.9 6,856,696 6,054,095 13.3

Export(inc. above) 24,242 12,618 92.1 22,114 9.6 178,851 154,172 16.0

Exports (% of sales) 3.9 2.4 145 bps 3.4 40 bps 2.6 2.5 6 bps

Source: Company, Siam

Bajaj Auto (BAAUTO)

Bajaj Auto’s (BAL) 2-W volumes grew 21.5% YoY, driven by both

exports & domestic volumes, which were up 18.9% YoY & 23.3%

YoY, respectively. On a YTDFY18 basis, its domestic volumes

declined 1.9% YoY resulting in a significant loss of market share

(down 170 bps YoY) in the 2-W space to 9.8%. In all likelihood

HMSI will displace BAL to be the 2nd

largest motorcycle player.

Pulsar volumes grew 8.4% YoY to 80,742 units (driven by 150-200

cc category). Volumes of its entry level segment (75-110 cc),

which includes brands like CT, Platina, Boxer & Discover, grew

44.5% YoY to 154,514 units. This was mainly due to strong

exports growth in Boxer & domestic growth in Discover. Volumes

of CT declined 22.6% YoY while Platina volumes grew 66.1% YoY.

Volumes of ‘V15’ & ‘V12’ declined 41.1% YoY to 5,624 units & 90%

YoY to 687 units. Overall volumes of Dominar were at 3,532 units

Its overall 3-W volumes grew 111.4% YoY after domestic volumes

grew 129.1% YoY driven by discontinuance of permits in

Maharashtra, new permits released in Delhi and replacement of

two-stroke to four-stroke engine in Bengaluru. In the domestic 3-W

market, BAL has gained market share by 790 bps YoY to 57.7%.

The revival in the export market lifted its volumes up 86.1% YoY



Total 2-wheeler sales 297,514 244,958 21.5 288,936 3.0 3,099,395 2,975,697 4.2

2W exports 122,025 102,671 18.9 125,825 -3.0 1,283,805 1,125,755 14.0

2W domestic sales 175,489 142,287 23.3 163,111 7.6 1,815,590 1,849,942 -1.9

Total 3-wheeler sales 60,369 28,555 111.4 64,211 -6.0 573,048 417,296 37.3

3W exports 21,835 11,733 86.1 25,129 -13.1 248,024 181,900 36.4

3w domestic sales 38,534 16,822 129.1 39,082 -1.4 325,024 235,396 38.1

Total Sales 357,883 273,513 30.8 353,147 1.3 3,672,443 3,392,993 8.2

Total Domestic Sales 214,023 159,109 34.5 202,193 5.9 2,140,614 2,085,338 2.7

Total Exports 143,860 114,404 25.7 150,954 -4.7 1,531,829 1,307,655 17.1

Exports as % of sales 40.2 41.8 -163 bps 42.7 -255 bps 41.7 38.5 317 bps


Hero MotoCorp: Sales volumes

459 537

530

561

547

554

599

630

550

525

414

563

556

65

73

65

73

77

69

80

91

81 80

59

7974

0

10

20

30

40

50

60

70

80

90

100

0

150

300

450

600

750

Feb

-17

Apr-1

7

Ju

n-17

Aug-17

Oc

t-17

Dec

-17

Feb

-18

('0

00s)

('0

00s)

Motorcycles Scooters

Source: Siam, ICICIdirect.com Research

Bajaj Auto: Sales volumes

245

244 294

277

205 2

65

284

370

326

264

229 2

89

298

29

28

36

37

40

43

51

59

57

62

64

64 60

42

38

46

45

48

3940

34

35

45

49

43

40

30

32

34

36

38

40

42

44

46

48

50

0

50

100

150

200

250

300

350

400

450

500

Feb-17

Apr-17

Jun-17

Aug-17

Oct-17

Dec-17

Feb-18

(%

)

('0

00s)

Two-Wheelers Three-Wheelers % exports



TVS Motors (TVSMOT)

TVS’ volumes (2-W+3-W) for February 2018 came in at ~2.9 lakh

units, up 38.1% YoY. The 2-W volumes grew 36.9% YoY while 3-

W volumes grew 86.3% YoY

Motorcycle segment volumes grew 95.5% YoY to 113,296 units.

Volumes of Apache & Star City (family) grew 95.1% YoY to 42,085

units & 81.4% YoY to 41,785 units. Volumes of Sport grew 107.1%

YoY to 15,498 units. Its scooter volumes grew 35.6% YoY to

93,573 units. This was after overall volumes of Jupiter grew 23.5%

YoY to 64,182 units. Volumes of Zest & Pep+ grew 198.1% YoY to

6,009 units & 10.4% YoY to 11,326 units. Volumes of its newly

launched Ntorq were at 8,309 units. On the flip side, Wego

volumes declined 21.4% YoY to 3,747 units. Its moped volumes

declined 5.3% YoY at 74,073 units

Export volumes grew 57.6% YoY to 58,564 units as 2-W & 3-W

volumes grew 55.2% YoY to 50,589 units & 74.2% YoY to 7,975

units, respectively



Motorcycles 113,296 57,946 95.5 98,649 14.8 1,221,164 979,577 24.7

Scooters 93,573 69,020 35.6 85,521 9.4 1,033,946 786,690 31.4

Mopeds 74,073 78,233 -5.3 78,825 -6.0 796,551 839,384 -5.1

Total 2-W Sales 280,942 205,199 36.9 262,995 6.8 3,051,661 2,605,651 17.1

3-Wheelers 9,731 5,223 86.3 8,806 10.5 87,790 63,892 37.4

Total Sales 290,673 210,422 38.1 271,801 6.9 3,139,451 2,669,543 17.6

Exports(incl. in above) 58,564 37,167 57.6 42,802 36.8 510,418 385,372 32.4

Exports as % of sales 20.8 18.1 16.3 16.7 14.8

Domestice sales 232,109 173,255 34.0 228,999 1.4 2,629,033 2,284,171 15.1


Honda Motorcycles & Scooters India (HMSI)

For February 2018, HMSI’s overall volumes grew 32% YoY to

519,782 units. This was after domestic motorcycle & scooter

volume grew 36.8% YoY & 30.1% YoY, respectively

Domestic motorcycles volumes grew 36.8% YoY as volumes of

CB Shine grew 21.7% YoY to 83,736 units. Domestic volumes of

Dream & Livo grew 83.8% YoY to 30,141 units & 424.4% YoY to

15,486 units, respectively. Domestic scooter volumes grew 39.6%

YoY, after Activa volumes grew 13.4% YoY to 243,826 units.

Volumes of Dio grew 93.6% YoY to 41,556 units. Volumes of

Aviator grew 6.4% YoY to 10,862 units. The newly launched CLIQ

& Grazia volumes were at 1,169 units & 23,620 units, respectively,

in February 2018

Export volumes grew 28.2% YoY to 30,144 units, mainly after

scooter volumes, grew 49.6% YoY to 17,039 units. Its export share

was at 5.8% of sales



Motorcycles 164,434 120,170 36.8 169,537 -3.0 1,801,576 1,459,710 23.4

Scooters 325,204 249,952 30.1 319,318 1.8 3,556,557 2,943,583 20.8

Total Sales 519,782 393,642 32.0 517,778 0.4 5,683,613 4,642,098 22.4

Exports(incl.above) 30,144 23,520 28.2 21,879 37.8 325,480 255,917 27.2

Exports as % of sales 5.8 6.0 -18 bps 4.2 157 bps 5.7 5.5 21 bps

Domestice sales 489,638 370,122 32.3 495,899 -1.3 5,358,133 4,386,221 22.2


TVS Motors: Sales volumes

58 9

6

100

118

112

109

112

144

125

93

95

99

113

69

84

81 8

6

90

92

114 1

22

107

78

84

86 9

4

78

71

60

72

66

62

83

85

76

72

69 79 7

4

0

50

100

150

200

250

300

350

400

Feb-17

Apr-17

Jun-17

Aug-17

Oct-17

Dec-17

Feb-18

('0

00s)

Motorcycles Scooters Mopeds


HMSI: Motorcycles & scooter sales volumes

120

85

183

176

145

168

192

183

144

151

124

170

164

250

254

369

334

271

344 3

94

386

293

282

239

319

325

0

75

150

225

300

375

450

525

600

675

Feb-17

Apr-17

Jun-17

Aug-17

Oct-17

Dec-17

Feb-18

('0

00s)

Motorcyc les Scooters



PV segment reports modest growth

The overall passenger vehicles segment grew 6.1% YoY to 335,807 units

for February 2018. Domestic PV volumes grew 7.8% YoY to 275,329 units

while exports volumes declined 1% YoY to 60,478 units. Within the sub-

segment, the utility vehicle (UVs) segment reported healthy growth of

20.4% YoY to 93,396 units, driving overall PV volumes. Volumes of the car

segment reported marginal growth of 1.9% YoY to 226,322 units while

that of vans declined 4.8% YoY to 16,089 units. MSIL is the market leader

and continues to outperform (overall volumes grew 15% YoY to 149,824

units) the overall passenger vehicle space.

For February 2018, the UV1 sub-segment grew 23% YoY to 68,996 units,

driven by Honda Car’s (WR-V) volumes were at 3,376 units while Tata

Motor’s (Nexon) volumes were at 4,337 units. MSIL’s Vitara Brezza‘s

overall volumes grew 15.8% YoY to 11,674 units. The facelift of S-Cross

lifted its volumes to 4,017 units vs. 2,651 units in February 2017. Volumes

of Gypsy were at 590 units vs. 106 units in January 2017. Hyundai’s Creta

volumes grew 13.6% YoY to 12,946 units. Volumes in the UV2 space

declined 5.9% YoY to 16,340 units. Toyota Innova’s volumes grew 0.9%

YoY to 6,129 units. Honda’s BR-V declined 11.4% YoY to 942 units.

Aggregate volumes of M&M’s models in the UV2 category (viz. Scorpio,

Bolero Plus, Xylo, XUV5OO) increased 0.3%YoY to 8,807 units. The

segment was impacted after General Motors stopped selling vehicles in

India (Enjoy & Tavera total volume was at 705 units in February 2017).

Commercial vehicle volumes grew 29% YoY to 96,320 units, as M&HCV

volumes grew 19.9% YoY to 40,889 units & LCV volume grew 36.7% YoY

to 55,431 units. M&HCV volumes were driven by increase in restrictions on

overloading and pick-up in infrastructure projects while LCV volumes were

aided by an increase in demand from e-commerce sector and also due to

higher demand from container & refrigerator vehicles. The MHCV/LCV

volume ratio was at 42:58 in February 2018 vs. 28:72 in April 2017 vs. the

average ratio 41:59 over the past 36 months.

Market share movement

According to Siam, the domestic market share for passenger vehicles (PV)

and commercial vehicles (CV) in February 2018 was as follows:

Exhibit 11: Domestic market share movement in passenger vehicles

47.6

16.8

5.6

7.6

5.0

17.3

50.1

16.4

6.2

7.4

5.3

14.6

50.1

16.3

6.3

7.4

5.2

14.6

0 10 20 30 40 50 60

Maruti

Hyundai

Tata Motors

M&M

Honda Cars

Others

(%)


Source: Siam, Data used is YTD * passenger vehicles as per Siam include Vans like Gio, Maxximo, Eeco, Ace

MSIL continues to dominate the PV segment with market

share of 50% in February 2018


Exhibit 12: Market share movement in A2 segment

29.0

23.2

64.0

69.5

0

10

20

30

40

50

60

70

80

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-1

6

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

(%

)

Hyundai Maruti

Source: Siam, Top two PV OEMs considered

Exhibit 13: Domestic market share movement in commercial vehicles

18.5

25.2

43.3

13.1

18.2

25.8

44.1

11.9

18.3

25.6

44.1

12.0

0

5

10

15

20

25

30

35

40

45

50

ALL M&M Tata Motors Others

(%

)


Source: Siam Data used is YTD

Exhibit 14: Segmental share in CVs

45.8

42.5

54.257.5

0

10

20

30

40

50

60

70

80

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-1

6

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

(%

)

M&HCV LCV

Source: Siam

The A2 (Mini & Compact) segment is the bread & butter

category of the passenger car segment. The segment

witnessed a demand revival, with volumes up 8.9% YoY on

a YTDFY18 basis, primarily supported by market leader

MSIL, which grew 17.2% YoY in the same segment

M&HCV & LCV volumes increased 19.9% YoY & 36.7% YoY,

respectively, in February 2018. Thus, overall CV volumes

grew 29% YoY

Tata Motors continues to be the market leader in the

overall CV space with market share of ~44%. It is followed

by M&M with market share of ~26% in January 2018

The MHCV/LCV ratio was at 42:58 in February 2018 vs.

28:72 in April 2017, after M&HCV volumes sharply

recovered from July 2017 onwards. Average M&HCV

volumes (in the past 36 months) has been ~41% of total

CV sales


Tata Motors (TATMOT)

Tata Motors’ overall standalone volumes increased 34% YoY to

63,761 units, backed by its domestic CV & PV segment, which

grew 43.5% YoY & 27.3% YoY, respectively

Domestic M&HCV volumes increased 26% YoY to 18,944 units

while LCV volumes grew 62.7% YoY to 22,278 units driven by 1)

restrictions on overloading; 2) pick-up in infrastructure projects, 3)

increase in demand from e-commerce; 4) higher demand from

container & refrigerator vehicles & 5) higher replacement demand.

On the PV side, volumes of Tiago & Tigor were at 6,711 units &

2,876 units, respectively. Within its UV portfolio, volumes of Hexa

(launched in January 2017) & Nexon (launched in September 2017)

were at 900 units & 4,337 units, respectively, in February 2018

JLR’s wholesale volumes grew 4.3% YoY at 56,905 units. Jaguar

volumes grew 0.9% YoY to 16,245 units. Land Rover volumes

grew 5.7% YoY to 40,660 units. We believe the Chinese market

would have largely supported the overall growth



Domestic MHCV 18,944 15,031 26.0 16,012 18.3 146,757 116,222 26.3

Domestic LCV 22,278 13,691 62.7 23,374 -4.7 203,404 142,362 42.9

Domestic Pass.Car Sales 11,653 11,652 0.0 13,415 -13.1 122,917 111,500 10.2

Domestic UV 6,118 2,305 165.4 6,640 -7.9 44,138 14,052 214.1

Exports 4,768 4,895 -2.6 5,183 -8.0 45,689 53,468 -14.5

Total Sales 63,761 47,574 34.0 64,624 -1.3 562,905 437,604 28.6

Jaguar 16,245 16,096 0.9 16,108 0.9 155,198 158,184 -1.9

Landrover 40,660 38,480 5.7 33,523 21.3 402,091 370,817 8.4

Total JLR Sales 56,905 54,576 4.3 49,631 14.7 557,289 529,001 5.3


Maruti Suzuki India (MARUTI)

Maruti Suzuki’s (MSIL) volumes grew 15% YoY to 149,824 units

Volumes of its domestic mini car segment grew 2.1% YoY, as

volumes of Alto & Wagon R grew 3.5% YoY & 1.2% YoY,

respectively. Domestic volumes of Baleno & Vitara Brezza were at

15,807 & 11,620 units, respectively. DZire’s (domestic) volumes

stood at 17,784 units. New Swift clocked volumes of 17,291 units.

Export volumes grew 24.9% YoY to 11,924 units

MSIL has commissioned a study to gauge the requirement of

potential customers as it embarks on the journey to bring on road

affordable electric vehicle by 2020



Omni, Eeco,Versa 12,425 14,195 -12.5 12,250 1.4 141,448 140,381 0.8

Alto, Wagon-R, Zen, Swift,Ritz,

Celerio, Dzire,Baleno 99,002 80,081 23.6 101,184 -2.2 1,069,262 907,159 17.9

SX4, Swift Dzire Tour, Ciaz 4,897 8,460 -42.1 5,062 -3.3 54,592 90,976 -40.0

Total Passengers 116,324 102,736 13.2 118,496 -1.8 1,265,302 1,138,516 11.1

Gypsy, Vitara,Ertiga,Brezza 20,324 17,863 13.8 20,693 -1.8 230,995 177,430 30.2

Total Domestic 136,648 120,599 13.3 139,189 -1.8 1,496,297 1,315,946 13.7

LCV (Super Carry) 1,252 136 NA 1,411 NA 8,621 596 NA

Exports 11,924 9,545 24.9 10,751 10.9 114,058 112,298 1.6

Total Sales 149,824 130,280 15.0 151,351 -1.0 1,618,976 1,428,840 13.3


Source: Company, Siam.

Maruti Suzuki India: Sales volumes

130

140

151

137

106

165

164

163

146

155

130 151

150

7.3 8.0

0

2

4

6

8

10

12

14

0

20

40

60

80

100

120

140

160

180

Feb-17

Apr-17

Jun-17

Aug-17

Oct-17

Dec-17

Feb-18

(%

)

('0

00s)

Total Sa les Ex port %


Tata Motors: Domestic sales volume

33.4

41.4

18.0

27.4

29.1

31.1

34.6

40.6

36.6

40.0

46.5

44.3

45.7

14.1

15.7

12.9

10.9

11.3

15.1

14.4 1

7.6

16.6

17.4

14.4

20.3

18.1

0

10

20

30

40

50

60

70

Feb-17

Apr-17

Jun-17

Aug-17

Oct-17

Dec-17

Feb-18

(000's

)

CV Sa les PV Sales


Jaguar Land Rover sales volume

54.6

71.6

41.9

47.1

49.4

51.4

44.4

57.4

49.8

54.2

55.1

49.6 56.9

10

20

30

40

50

60

70

80

0

20

40

60

80

100

Feb'1

7

Mar'1

7

Apr'1

7

May'1

7

June'1

7

July

'17

Aug'1

7

Sept'1

7

Oct'1

7

Nov'1

7

Dec'1

7

Jan'1

8

Feb'1

8

(000's

)

(%

share o

f total volu

mes)

% Jaguar % LR JLR total volumes(RHS)



Ashok Leyland (ASHLEY)

Ashok Leyland’s (ALL) volumes grew 29.2% YoY to 18,181 units,

as M&HCV volumes grew 21.2% YoY to 13,726 units. Its LCV

segment grew 62.7% YoY to 4,455 units. On a YTDFY18 basis, its

M&HCV market share has improved 55 bps YoY to ~34% YoY

Volumes of M&HCV passenger declined 6.9% YoY to 1,757 units

while M&HCV goods volumes grew 26.8% YoY to 11,969 units.

Exports grew 16.5% YoY, with overall share at 5.3% of sales

ALL aims to diversify its business with focus on 1) LCV – aiming to

launch one product per quarter; 2) Exports – plans to increase

export revenue to >30% from the current <10%; 3) Aftermarket –

aims to increase higher margin aftermarket business; 4) Defence –

aims to increase its revenue by 10x (from the current revenue of

~| 500 crore to | 5,000 crore, going forward)

Mahindra and Mahindra (MAHMAH)

M&M’s overall automotive volumes grew 19.7% YoY to 51,127

units. Its core domestic UV volumes grew 7.4% YoY to 20,977

units. Overall volumes of Bolero (family) grew 24.4% YoY to 8,082

units. Volumes of TUV3OO grew 6.7% YoY to 2,523 units while

KUV1OO volumes declined 14.6% YoY to 2,561 units. Volumes of

Scorpio increased 4.5% YoY to 5,072 units while volumes of

XUV5OO declined 14.8% YoY to 2,118 units

M&M’s tractor volumes grew 36.5% YoY to 20,483 units. Domestic

tractor industry volumes grew 38.6% YoY to 47,807 units & 19.4%

YoY to 638,191 units for February 2018 & YTDFY18, respectively


Segment Feb-18 Mar-17 %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg

M&HCV Passenger 1,757 1,888 -6.9 1,871 -6.1 17,941 20,220 -11.3

M&HCV Goods 11,969

9,441 26.8 11,771 1.7 96,434 77,804 23.9

LCV 4,455 2,738 62.7 4,458 -0.1 38,023 28,350 34.1

Passenger Vehicles - 0 NA 0 NA - - NA

Total Sales 18,181 14,067 29.2 18,100 0.4 152,398 126,374 20.6

Exports 968 831 16.5 1,616 -40.1 15,319 10,618 44.3





UV’s 20,977 19,529 7.4 22,235 -5.7 209,322 198,714 5.3

4-Wheeler pickups 19,225 15,094 27.4 19,309 -0.4 176,521 151,416 16.6

M & HCV 1,721 1,289 33.5 1,693 1.7 14,781 12,653 16.8

Total 4wheeler Sales 43,335 36,988 17.2 44,688 -3.0 413,762 369,813 11.9

3-Wheeler 5,138 3,426 50.0 4,744 8.3 48,023 47,244 1.6

Total Domestic Auto Sales 48,473 40,414 19.9 49,432 -1.9 461,785 417,057 10.7

Exports 2,654 2,300 15.4 2,616 1.5 24,803 34,542 -28.2

Total Auto Sales 51,127 42,714 19.7 52,048 -1.8 486,588 451,599 7.7


Tractors - Domestic 19,280 13,834 39.4 20,647 -6.6 274,976 230,436 19.3

- Exports 1,203 1,173 2.6 1,228 -2.0 14,130 13,219 6.9

Total Tractors 20,483 15,007 36.5 21,875 -6.4 289,106 243,655 18.7



Mahindra and Mahindra: Sales volume

42.7

56.0

39.4

41.9

35.7 41.7

42.1

53.7

51.1

38.6

39.2

52.0

51.1

0

10

20

30

40

50

60

70

Feb

-17

Mar-17

Apr-1

7

May-1

7

Ju

n-17

Ju

l-17

Aug-1

7

Sep-17

Oc

t-17

Nov-1

7

De

c-17

Ja

n-18

Feb

-18

(000's

)


Mahindra and Mahindra: Tractor sales

15.0 19.3

26.0

25.6

32.9

18.8

16.5

45.6

40.3

22.8

18.3 21.9

20.5

0

5

10

15

20

25

30

35

40

45

50

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

(000's

)


Ashok Leyland: Total sales

11.3 15.3

4.5

6.1 9

.2

9.0

10.6

11.8

9.1

10.6 1

5.9

13.6

13.7

2.7

3.4

2.6 2

.9

3.1

3.0 3

.0 3.6

3.8 3

.8

3.3

4.46

4.46

0

5

10

15

20

25

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

(000's

)

M&HCV LCV



Top domestic model wise volumes for February 2018

Exhibit 19: Top 10 passenger vehicle – Models sold in India (in units)

S.No. Models Feb-17 Models Feb-18

1 Alto 19,524 Alto 19,760

2 DZIRE TOUR 16,613 DZIRE 17,784

3 Wagon R 13,555 Swift 17,291

4 Grand i10 12,862 Baleno 15,807

5 Swift 12,328 Wagon R 14,029

6 Elite i20 10,414 Elite i20 13,378

7 VITARA BREZZA 10,046 VITARA BREZZA 11,620

8 Kwid 9,648 Grand i10 10,198

9 Creta 9,002 Creta 9,278

10 Celerio 8,315 Bolero 8,001

Source: Siam

Exhibit 20: Top 10 two-wheelers – Models sold in India (in units)

S.No. Models Feb-17 Models Feb-18

1 Activa 217,098 Activa 247,377

2 Splendor 208,571 Splendor 238,722

3 HF Deluxe 121,902 HF Deluxe 165,205

4 TVS XL Super 77,053 CB Shine 82,189

5 Passion 69,763 TVS XL Super 71,931

6 CB Shine 66,402 Glamour 66,064

7 Pulsar 53,932 Jupiter 63,534

8 Jupiter 51,817 Passion 61,895

9 Classic 350 40,768 Pulsar 60,772

10 Glamour 39,288 Classic 350 48,557

Source: Siam


Upcoming 2-Ws & 4-Ws in India

Exhibit 21: Upcoming OEM wise 2-Ws and 4-Ws in India

S.No. OEM Bramd / Model Launch Date

1 Maruti Suzuki Vitara Apr-18

2 Maruti Suzuki New Ertiga Jun-18

3 Maruti Suzuki Jimmy Dec-19

4 Hyundai New Eon Apr-18

5 Hyundai i20 Sport Jun-18

6 Hyundai Kona Nov-18

7 Mahindra & Mahindra New XUV5OO Aug-18

8 Honda Cars Honda Civic Mar-18

9 Honda Cars Amaze Jun-18

10 Honda Cars Honda CR-V Mar-19

11 Hero Motocorp Dare 125 Mar-18

12 Hero Motocorp Hatsur Mar-18

13 Hero Motocorp Xtreme 200R Apr-18

14 Hero Motocorp Xpluse Jun-18

15 Hero Motocorp Duet-E Nov-18

16 Hero Motocorp Duet 125 Nov-18

17 Hero Motocorp Maestro Edge 125 Dec-18

18 TVS Motors Dazz Mar-18

19 Eicher Motors Continental GT 650 Jun-18

Source: Company, ICICIdirect.com Research, Autondtv


State wise sales mix for 9MFY18 (April – December 2017)

Exhibit 22: Top 10 state wise PV volume for 9MFY18 (in units)

280598

206168

213525

192353

166716

162866

148487

125119

119095

91440

298564

173603

188788

175299

178216

159030

144092

120025

105788

90746

-6.0

18.8

13.1

9.7

-6.5

2.43.1

4.2

12.6

0.8

-10

-5

0

5

10

15

20

25

0

50000

100000

150000

200000

250000

300000

350000

Maharashtra

U.P.

Guja

rat

Kerala

Karnataka

Tam

il N

adu

Delh

i

Haryana

Raja

sthan

Tela

ngana

9MFY18 (units) 9MFY17 (units) YoY growth %

Source: Siam

Exhibit 23: Top 10 state wise 2-W volume for 9MFY18 (in units)

2051951

1470758

1198088

876549

1038063

909223

697751

846472

888076

766824

1600685

1427179

1216420

877697

911788

900574

564264

695708

816671

689959

28.2

3.1

-1.5-0.1

13.8

1.0

23.7

21.7

8.7

11.1

-5

0

5

10

15

20

25

30

0

500000

1000000

1500000

2000000

2500000

U.P.

Maharashtra

Tam

il N

adu

Andhra Pradesh

Guja

rat

Karnataka

Bih

ar

Madh. P

rad.

Raja

sthan

West B

engal


Source: Siam

State wise market share of PV for 9MFY18

Maharasht

ra

11%

U.P.

8%

Gujarat

9%

Kerala

8%

Karnataka

7%

Tamil Nadu

7%

Delhi

6%

Haryana

5%

Rajasthan

5%

Telangana

4%

Others

30%


State wise market share of 2-W for 9MFY18

U.P., 13%

Maharashtra,

10%

Tamil Nadu, 8%

Andhra

Pradesh, 6%

Gujarat, 7%

Karnataka, 6%

Bihar, 5%

Madh. Prad.,

5%

Rajasthan, 6%

West Bengal,

5%

Others, 29%



State wise sales mix for 9MFY18 (April – December 2017)

Exhibit 24: Top 10 state wise CV volume for 9MFY18 (in units)

77065

53994

41444

38834

37415

34021

34157

32353

31201

20948

68986

40320

41059

34156

32157

33636

34957

24700

27532

16667

11.7

33.9

0.9

13.7

16.4

1.1

-2.3

31.0

13.3

25.7

-5

0

5

10

15

20

25

30

35

40

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Maharashtra

U.P.

Tam

il N

adu

Raja

sthan

Karnataka

Andhra Pradesh

Guja

rat

Haryana

West B

engal

Assam


Source: Siam

Exhibit 25: Top 10 state wise 3-W volume for 9MFY18 (in units)

39967

99745

29623

33082

26565

27633

23366

26852

20827

16067

41660

52386

30698

44641

26654

29135

22057

28745

21620

13132

-4.1

90.4

-3.5

-25.9

-0.3-5.2

5.9

-6.6-3.7

22.3

-40

-20

0

20

40

60

80

100

0

20000

40000

60000

80000

100000

120000

Guja

rat

Maharashtra

Karnataka

Andhra Pradesh

Tela

ngana

U.P.

Kerala

Bih

ar

Tam

il N

adu

Madh. P

rad.


Source: Siam

State wise market share of CV for 9MFY18

Maharashtra

13%

U.P.

9%

Tamil Nadu

7%

Rajasthan

7%

Karnataka

7%

Andhra

Pradesh

6%

Gujarat

6%

Haryana

6%

West Bengal

5%

Assam

4%

Others

30%


State wise market share of 3-W for 9MFY18

Gujarat, 9%

Maharashtra,

23%

Karnataka, 7%

Andhra

Pradesh, 7%Telangana, 6%

U.P., 6%Kerala, 5%

Bihar, 6%

Tamil Nadu,

5%

Madh. Prad.,

4%

Others, 22%



RATING RATIONALE

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ratings to its stocks according to their notional target price vs. current market price and then categorises them

as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional

target price is defined as the analysts' valuation for a stock.

Sector view:

Overweight compared to index

Equal weight compared to index

Underweight compared to index

Index here refers to BSE 500

Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]


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