Auto & Auto Ancillary Sector – Q3 FY20 Results Analysis

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In this article, you will get the latest quarterly result updates of Auto and Auto Ancillary sector companies comprising in NIFTY 200.

Auto & Auto Ancillary Sector Analysis

Introduction

In this article, you will get the latest quarterly result updates of Auto & Auto Ancillary sector companies comprising in NIFTY 200. Updated as on 12th Feb, 2020.

We have already covered the Banking, Finance & Insurance sector analysis and Ready Reckoner of NIFTY 200 Stocks Q3 FY2019-20 results in our earlier article.

Detailed Stock Analysis by Invest Yadnya
Detailed Stock Analysis by Invest Yadnya

Here, the percentage growth year-on-year (YoY%) as well as quarter-on-quarter (QoQ%) for the Market Capitalization (Mkt Cap), Revenue and Net Profit (PAT) of Auto and Auto Ancillary sector companies in NIFTY 200 is given.

Sr. No.Company NameMkt Cap QoQ%Mkt Cap YoY %Revenue QoQ%Revenue YoY %PAT QoQ%PAT YoY %
1Amara Raja Batteries Ltd.3%-2%3%3%-25%25%
2Apollo Tyres Ltd.-3%-30%11%-7%109%-12%
3Ashok Leyland Ltd.23%-21%
4Bajaj Auto Ltd.8%16%-1%3%-10%15%
5Balkrishna Industries Ltd.30%6%
6Bharat Forge Ltd.9%-5%-15%8%-77%-84%
7Bosch Ltd.15%-25%10%-18%-52%-64%
8Castrol India Ltd.-5%-15%19%-2%44%28%
9Cummins India Ltd.-2%-35%10%-3%14%0%
10Eicher Motors Ltd.24%-5%8%1%-15%-2%
11Endurance Technologies Ltd.11%-14%-7%-10%
12Escorts Ltd.-1%-16%24%-1%50%10%
13Exide Industries Ltd.-4%-30%-6%42%-52%-24%
14Hero MotoCorp Ltd.-10%-22%-8%-10%1%14%
15Mahindra & Mahindra Ltd.-4%-31%5%91%-863%-116%
16Maruti Suzuki India Ltd.8%-2%22%4%16%5%
17Motherson Sumi Systems Ltd.40%-12%-2%-5%-27%-39%
18MRF Ltd.8%0%2%1%5%-14%
19Tata Motors Ltd.71%14%10%-7%1012%NA*
20TVS Motor Company Ltd.12%-17%-4%2%-39%-11%
21Varroc Engineering Ltd.-7%-44%
22Average 7%4%6%4%-10%-21%

*Tata Motors Ltd. was in losses for Dec-18 quarter.

Auto & Auto Ancillary Sector Q3 FY20
Auto & Auto Ancillary Sector Q3 FY2019-20 Results Analysis

Sector Update – Auto & Auto Ancillary

Indian Auto segment volumes have declined significantly in the last 12 months. Increased cost, weak consumer sentiments surrounded by slowdown in the economy and low rural demand could be some of the reasons for this. Uneven rainfall is the reason why rural demand has fallen. With BS-VI, further increase in cost is expected.

Key Findings
  • In December 2019, auto sales registered a YoY decline of about 9% overall compared to a decline of about 2% a year ago. This fall in sales is largely due to commercial vehicles and two wheeler vehicles.
  • The hit in the margins could also be attributed to huge discounts and marketing offers given by manufacturers to clear BS-IV inventories.
  • Volatility in freight rates and increase in fuel prices has further impacted demand. Sales were further impacted due to delay in framing the Vehicle Scrappage Policy.
  • Hero MotoCorp is a leader in motorcycle segment and in the rural segment. It can be clearly observed how rural demand has affected its revenues.
  • Bajaj Auto has always been no.2 in terms of market share but its market share has constantly seen a downtrend. It dominates the 125-250cc segment with the help of its Pulsar range.
  • TVS Motors underperformed, mainly due to decline in mopeds and motorcycles. Scooter sales declined by 12.2% YoY vs. industry decline of 16.2% YoY.
  • In line with auto, auto ancillaries too slowed down and witnessed a slower growth due to fallen demand from the automobiles industry.
  • With BS-VI and electric vehicles production in the domestic market, a range of updated as well as new auto components is expected to enter the market. At the same time, capex on technology advancement is going to put high pressure on companies’ cash flow.
  • The share of scooters in the 2W space has been rising and higher conversion to EVs is expected in this segment. Currently, E2W sales are dominated by Hero Electric and start-ups like Ampere, Okinawa, etc. but giants like Bajaj Auto and TVS Motor have entered the segment this year which could lead to a faster adoption of EVs
  • Passenger and commercial vehicle sales didn’t decline much compared to other vehicle segments. The tractors segment delivered a positive growth.
  • Maruti Suzuki managed to outperform its peers given its  market share. Tata Motors was able to deliver good numbers mainly due to its JLR’s overseas business.

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