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HDFC Securities Institutional Equities
In Q3, while two-wheeler demand failed to pick up even in the festive season, passenger vehicle, tractor and commercial vehicle demand remained healthy. Supply chain constraints for major original equipment manufacturers seem to have eased QoQ. Export demand continues to be weak, given the geopolitical tensions.
Overall, we expect auto, auto ancillaries and tyre companies to see the benefit of softening input costs from Q3 onwards. Benefits from currency depreciation would become visible for the export-oriented companies.
However, the extent of margin expansion in Q3 would largely depend on volume growth QoQ as well as discounting trends in Q3.
We expect CV players to outperform two-wheeler and PV players in terms of QoQ earnings growth in Q3.
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More Research Reports On Automobiles Sector Q3 FY23 Earnings Preview
Benign Commodity Costs To Aid In YoY Margin Expansion: Systematix
Demand Largely Stable Post Festive Season, Supplies Improving: Motilal Oswal
Post-Festive Demand Scenario Weak For Two-Wheelers, PVs: Prabhudas Lilladher
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