Auto, Auto Ancillaries Q3 Results Preview- Improving Margin To Cushion Earnings Sequentially: 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.Q3 FY23 has been a quarter of weak two-wheeler and passenger vehicle wholesales due to de-stocking as against strong commercial vehicle and tractor volumes. Though retail demand across segments has been robust, driven by festive season, harvesting season and year-end discounts, personal mobility segment wholesales were subdued for majority players. Thus, we believe for CV and tractor players, profitability would improve ~200 bps QoQ led by the dual impact of better scale and lower input commodity costs. For personal mobility space, we expect margins to remain flattish QoQ amid weaker scale, resulting in weaker earnings sequentially for majority. In Q4 FY23, we expect earnings of whole space to improve led by superior scale (seasonal aspect) and lag effect of weaker commodity prices. Within ancillary businesses, we expect profitability of tyre players to recover by ~200 bps QoQ led by a combination of price hikes and decline in raw material basket cost. For original equipment manufacturers centric ancillary players, both domestic and foreign, it would be a combination of flattish production QoQ as against a slight improvement in Ebitdam QoQ driven by the gradual easing in input cost inflation drivers..Click on the attachment to read the full report:.Auto, Auto Ancillary Q3 Results Preview - Margin Recovery To Take Centre Stage: ICICI Direct.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 Q3 Results Preview- Improving Margin To Cushion Earnings Sequentially: ICICI Securities

Q3 FY23 has been a quarter of weak two-wheeler, PV wholesales due to de-stocking as against strong CV and tractor volumes.

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