Automotives Q4 Results Preview - Four-Wheelers To Perform Better Versus Two-Wheelers: ICICI Securities

ICICI Securities Report

We expect Q4 FY24 YoY revenue/Ebitda/profit after tax growth of ~15%/~25%/~25% (excluding Tata Motors Ltd.) with commensurate contribution from revenue growth and Ebitdam, pushing Ebitda growth. ~10% YoY volume growth in original equipment manufacturers, ~5–6% growth in average selling price and a dip in raw material cost would be the key triggers for robust YoY earnings growth.

Ebitda growth would likely be more pronounced for auto ancillary players on a YoY- basis driven by a recovery in exports, premiumisation in domestic auto production, scaling up of demand from domestic OEMs along with raw material cost reversal.

We expect tyre players to deliver strong YoY earnings growth of ~30% on the back of favorable raw material basket cost. Overall, within OEMs, we expect four-wheeler to deliver superior results versus two-wheeler players.

Top picks: Mahindra and Mahindra Ltd. and Eicher in OEMS; CIE Automotive Ltd. and Samvardhana Motherson International Ltd. in ancillaries.

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