Automobiless Q4 Results Preview - Premiumisation Is The Way To Go: HDFC Securities

Premium two-wheelers and utility vehicles shine, commercial vehicles, tractor demand tapers

Vehicles travels along a two way road in the evening at Navi Mumbai. (Photographer: Vijay Sartape/ Source: NDTV Profit)

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HDFC Securities Institutional Equities

The auto sector has outperformed the Nifty Index in Q4, led largely by a sharp rally in some two-wheeler and passenger vehicle stocks.

We continue to maintain our Buy rating on both Mahindra and Mahindra Ltd. and Maruti Suzuki Ltd. as we expect both of them to continue to outperform the utility vehicle segment, which would in turn help improve their performance.

Auto ancillary companies to post single-digit revenue growth QoQ

The demand from PVs and two-wheelers had been favorable for auto ancillaries on a YoY basis. The growth from PVs is likely to taper off from Q1 FY25 due to a high base in FY24.

The demand for commercial vehicles is likely to remain muted as well. With significant exposure to Europe, higher input and freight costs are likely to keep margins under pressure for most auto ancillaries.

Overall, auto ancillaries within our coverage universe are expected to post 11% QoQ earnings growth.

Click on the attachment to read the full report:

HDFC Securities Instituitinal Equities Autos - Q4FY24 Results Preview.pdf
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Also Read: Industrials Q4 Results Preview - Strong Ordering Excluding Roads: HDFC Securities

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