Auto Q3 Results Preview – Maruti Suzuki, Hyundai Motor, Endurance Among Motilal Oswal's Top Picks; Here's Why

Motilal Oswal Report

Auto OEMs are expected to deliver just ~6% YoY volume growth in Q3 FY25E despite the festive season. While two-wheeler demand turned weak in Q3, passenger vehicle OEMs saw a better demand uptick, especially in the festive season. Tractor demand saw a marked revival in Q3, a clear indicator of improving rural sentiment. However, CVs continued to see weak demand.

Given stable input costs QoQ, we expect OEMs within our coverage universe to post stable margins. Revenue/Ebitda/PAT for our coverage companies (excluding Jagura LandRover) are expected to grow ~9%/9%/6% YoY in Q3 FY25. Mahindra and Mahindra Ltd. (+30%), Eicher Motors Ltd.(+12%) and Maruti Suzuki India Ltd. (+11%) are likely to outperform peers.

On the other hand, Hyundai Motors is likely to see the steepest earnings decline of 29%.

For auto ancillaries under our coverage, we expect ~11%/3%/10% YoY growth in revenue/Ebitda/PAT in Q3 FY25. We expect Samvardhana Motherson International (+47%), Endurance Technologies (+38%), Balkrishna Industries (+24%), Happy Forgings (+18%), Exide Industries (+17%) and Bosch (+15%) to be the top earnings growth drivers.

On the other hand, tyre companies are likely to continue to post earnings declines due to persistent input cost pressure. In Q3 FY25, we have further cut estimates for seven out of 26 companies, with no material upgrades, as we remain cautious on the prospects of a meaningful demand recovery across segments.

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