1 of 5 6/6/2018, 11:32 AM

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1 1 of 5 6/6/2018, 11:32 AM Deccan Chronicle Andhra Bhoomi Asian Age epaper epaper POWERED BY Search Last Updated:01:50:00 AM Wednesday June 6,2018 Home Politics,Plan & Policy Companies & Markets Brand Around the Globe Miscellany Editorial None of My Business Archives

2 2 of 5 6/6/2018, 11:32 AM Home > Companies And Markets No speed-breakers in sight By FC Bureau, Wednesday, 6 June 2018 City: New Delhi Strong demand and low base help companies to report robust growth The automobile sector has witnessed another quarter of strong revenue growth during January-March, 2018: The sector reported robust revenue growth for the fourth quarter on the back of healthy rural demand, higher realisation and a low base. Most automotive manufacturers reported double-digit revenue growth. Escorts and TVS Motor reported more than 40 per cent revenue growth year-on-year (YoY) while Bajaj Auto (+38 per cent), Eicher Motors (+34 per cent) and Ashok Leyland (+32 per cent) too showed accelerated YoY growth. Auto ancillary companies also put up equally strong revenue performance, with Motherson Sumi (37 per cent YoY) and Exide Industries (26 per cent YoY) being the top performers. An Emkay Global report said, overall, revenue for companies under our coverage grew by 22 per cent YoY. Excluding Tata Motors, growth was higher at 27 per cent YoY (see table). The fourth quarter consolidated the recovery staged by the automobile sector during the last financial year. Care Rating said the auto industry has recovered during FY18 helped by policy measures like BS-III vehicles ban, GST implementation and interest rate revisions. Near normal monsoon in most parts of the country as well as higher farm incomes and disposable incomes helped two-wheeler and passenger car sales. Launch of new models in two-wheeler and passenger vehicles segments also boosted demand. Commercial vehicles, comprising medium, heavy and light commercial vehicles (M&HCVs/LCVs) witnessed strong YoY sales on the back of infrastructure related policy announcements by government during the year, said Care Ratings. It said the industry registered higher profits during the quarter due to healthy sales coupled with lower expenses. Emkay Global says Ebitda margins have improve sequentially for most companies, thanks to better scale that countered the adverse impact of commodity inflation. Commodity price movement (price comparison at start of Q4FY18) was adverse sequentially, with an increase in the prices of aluminum, steel, copper and crude oiland its derivatives. Management commentary, the brokerage said, indicates that the impact of commodity inflation will be set off in subsequent quarters through price increases and cost-reduction efforts. Original equipment manufacturers (OEMs) that witnessed better margins quarter-on-quarter (QoQ) included Tata Motors (+90 basis points), Ashok Leyland (+70 bps), Mahindra & Mahindra (+40 bps) and Eicher Motors (+40 bps). Overall, Ebitda margin for 14 companies under Emkay s coverage expanded by 40 bps QoQ. However, earnings, barring Tata Motors, were lower at 20 per cent YoY compared to Ebitda growth of 37 per cent a year ago, primarily due to lower growth in other income and higher tax rate. We believe that the Indian Automobile industry is in a sweet spot on the back of a cyclical recovery across segments. Going forward, we believe that the stage is set for double-digit growth in automotive demand, said the report. Management expectations Bajaj Auto: In FY19, exports are expected to grow by 14 per cent to 1.9m units. Dollar appreciation is positive and FY19 exchange realisations will be better than current market rates. Domestic motorcycle industry to grow by per cent in FY19 and the company expects to gain market share. Domestic three-wheeler (3W) outlook remains positive, led by opening of permits in Telangana, Karnataka and Delhi. Hero MotoCorp: Two-wheeler (2W) industry to grow at close to double-digits in FY19. Management expects HMCL to sustain market share on the back of new products, favourable geography mix (better share in high-growing North and East regions) and robust rural demand. Expiry of Haridwar plant tax benefits would compress Ebitda margin by 60 bps. Halol production to increase from 300,000 units in FY18 to 600,000 units in FY19. Eicher Motors: Production to increase from 829,227 units in FY18 to 950,000 units in FY19. The addition of phase-ii project at Vallam Vadagal plant to increase annual capacity by 300,000 units. New products such as Thunderbird X, Himalayan Sleet and Classic Gunmetal Grey are witnessing strong demand. TVS Motors: 2W industry growth is expected at 8-10 per cent for FY19 and the company expects to outpace industry performance. Margin to improve on better scale and cost reduction initiatives such as value addition/value engineering, platform rationalisation as well as localisation.

3 3 of 5 6/6/2018, 11:32 AM Maruti Suzuki: Industry is expected to grow by 8-9 per cent. The company will outpace industry growth with double-digit growth rate. Production in the phase-i of Gujarat plant to increase to 250,000 units in FY19 from 157,000. Phase-II of the Gujarat plant to commence operations in January Order bookings stand at 110,000 units versus 120,000 a year ago. M&M: Volume upcycle to persist in FY19, with growth of 15 per cent seen in utility vehicle industry, per cent in CV industry and 8-10 per cent in tractor industry.three new products (S201 SUV, U321 MPV and Y400 Luxury UV) to be launched in the UV segment. Multiple products to be launched in CVs in T segments. Mahi-ndra Trucks and Buses division to achieve Ebitda breakeven in FY19. MORE FROM COMPANIES AND MARKETS Consolidation seen as continuing The market ended lower in a volatile trading session. The S&P BSE Sensex fell 108 points or 0.31 per cent to settle at 34, Gross NPAs cross Rs 10L crore in FY18 Bad loans of banks have increased to Rs 10.3 lakh crore or 11.2 per cent of advances, as on March 31, Wipro hints at handsome hikes for top learners Going digital is extremely critical for techies both for basic survival and for annual salary increments. Sebi outlines norms for preferential issue by InvITs Markets regulator Sebi on Tuesday put in place a detailed framework for listed Infrastructure Investment Trusts (InvITs) to make preferential issue of units to institutional investors. EDITORIAL OF THE DAY Secure the data It is imperative that the government ensure protection against data mining More.. -- Previous Editorials JOIN PRIME AT Watch Now Latest News» A Sparkling Edition to the Fratelli Bouquet» The Kashmiri Plot Thickens» No unprovoked attack from Pakistan to go unanswered

4 4 of 5 6/6/2018, 11:32 AM» Consolidation seen as continuing» Damage control: BJP reaches out to disgruntled allies Most Read» Broad, range bound mode continues» Impact of GST on employer-employee transactions» Reimagining business» Keep all options open as results roll in» A new horizon for India s home market BOTTOMLINE BOTTOMLINE

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