NDTV Profit'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 NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
According to the domestic brokerage firm Motilal Oswal, the demand has held up well in Q1, especially in passenger vehicles and tractors. The resolution of the West Asia crisis has resulted in a sharp decline in crude oil prices alongside a dip in commodity costs. Needless to say, both these factors augur well for the auto sector.
The decline in input costs suggests that the margin pressure is unlikely to sustain beyond Q1 for the sector. Given the improving macro environment and strong Q1 performance, the brokerage has raised its estimates for a few companies:
Apollo Tyres (+11%/+8%), Bajaj Auto (+6%/+5%), Endurance Technologies (+5%/+9%), Exide Industries (+7%/+11%), Happy Forgings (+6%/+5%), Maruti Suzuki India (+5%/+6%), Motherson Sumi Wiring India (+5%/+6%), Sona Comstar (+5%/+7%) and Tata Motors Passenger Vehicles (+10%/+4%).
On the other hand, companies that witnessed earnings downgrades include Ceat (-9% for FY27E) and Ashok Leyland (-6% for FY27E).
A decline in crude is clearly beneficial for the overall economy as well as the CV segment. Given easing input cost pressures, price hikes taken by original equipment manufacturers, and stable demand across segments, the brokerage expects renewed investor interest in the sector in coming quarters.
The only lingering concern remains the probable impact of El Nino expected in the current year. In this scenario, OEMs with a healthy launch pipeline are likely to be preferred over others.
Maruti Suzuki, TVS Motor, M&M are Motilal Oswal's top OEM picks. Among auto ancillaries, Motherson Sumi Wiring, Endurnce Technologies, Samvardhana Motherson International are the brokerage's top picks
Click on the attachment to read the full report:
ALSO READ: ONGC Gets A Rating Upgrade From Motilal Oswal — Check Target Price, Key Triggers
DISCLAIMER
This report is authored by an external party. NDTV Profit 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 NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
