Q3 Result Preview- Bajaj Auto, Hero other 2W and PV manufacturers to lead earnings growth for auto producers
Also read- MSCI EM Index: India surges to second place; weightage likely to cross 20% by mid-2024 The third quarter witnessed healthy demand across the segments, as volumes are expected to grow 18% YoY, said analysts at Motilal Oswal Financial Services in their preview report. The two wheelers outperformed other segments and are likely to rise 20% YoY while volumes for three wheelers, passenger vehicles, and commercial vehicles are likely to improve 15%, 12%, and 3% YoY, respectively, while the same should decline 4% YoY for tractors, as per MOFSL estimates.
Analysts at Kotak Institutional Equities in their quarterly preview said that they expect automotive OEM revenues (except for Tata Motors) to improve 15% year on year, mainly due to more than 20% year-on-year growth in total two volumes, high single-digit yoy growth in passenger vehicle volumes, low single-digit yoy improvement in the Commercial vehicles segment’s volumes and low-to-high single-digit increase in average selling prices due to price increases and richer product mix, partly offset by a mid-single-digit decline in the tractor segment’s volumes. The export volumes have remained lower nevertheless are likely to see gradual recovery as the supply chain situation improves further, followed by improving macro-outlook in key geographies.
On profitability front the regular decline in the commodity prices have remained favorable over the last few quarters. Inflationary pressures peaked in the year-ago quarter and prices corrected for most commodities.
The OEM may see improvement in the operating performance and Earnings before interest tax depreciation and amortisation is likely to see further improvement. Analysts at MOFSL said that despite a slight increase in
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