Auto, Auto Ancillaries Q2 Results Preview- Earnings To Stabilise Finally; Margins To Improve: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.Post a period of falling gross margin across our auto coverage universe in the past three quarters, we expect the sector to see earnings stabilising finally in Q2 FY23. Retail demand across segments, barring two-wheelers has been robust, despite Q2 being a seasonally adverse quarter for most players. Thus, with overall Ebitda margin being flat for the universe QoQ, we expect overall earnings for the space to remain flattish QoQ, with revenue being largely steady. Next quarter onwards, we expect improved profitability amidst steady demand to drive earnings growth sequentially. Domestic retails in passenger vehicles, tractors and commercial vehicles were flat QoQ versus two-wheelers being down 11%, resulting in overall sectoral revenue being flat QoQ. We believe operating leverage is unlikely to impact margin for most players this quarter, though partial lag impact of the decline in input commodity prices would start getting reflected in the gross margin. .Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Auto, Auto Ancillaries Q2 Results Preview- Earnings To Stabilise Finally; Margins To Improve: ICICI Securities

We believe operating leverage is unlikely to impact margin for most players this quarter.

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