Automobiles Q4 Results Preview - Two-Wheelers, Passenger Vehicles Segment To Outperform: Prabhudas Lilladher

Prabhudas Lilladher Report

We anticipate Q4 FY24 to deliver strong revenue/Ebitda growth of 15.5%/31% YoY mainly led by passenger vehicle and two-wheeler/three-wheeler companies as they continue to deliver strong volume.

Benign commodity prices along with healthy volume growth could result in operating leverage benefit which should aid margins. From our original equipment manufacturer coverage universe, we expect-

1. aggregate revenue to expand by ~16% YoY (~14% excluding Jaguar Land Rover), owing to robust volume in growth in PV and two-wheeler segment,

2. Ebitda to grow by ~31% YoY,

3. aggregate average selling price to remain flat as compared to last year, however, we forecast sequential recovery of ~11%.

For our coverage universe we change our FY24-26E revenue estimates by - 2% to +5% and Ebitda estimates by -2% to +7%. Maruti Suzuki India Ltd. and Mahindra and Mahindra Ltd. are our preferred picks.

We downgrade Bajaj Auto Ltd. from “Reduce” to “Sell” as the valuation is expensive and continued performance is already priced in.

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