After a strong volume performance in 2QFY15 (helped by an early festive season), volume growth rate fell in 3QFY15 due to the festive calendar shift and moderation in consumer sentiment. As a result, volumes were flattish QoQ in contrast to a heavier 3Q in previous years. This would result in margins being flat QoQ for most companies. Exceptions would be Maruti (benefit of JPY depreciation on imports) and battery makers (fall in lead price). We see the highest earnings upgrade potential for Maruti (margin-driven) and a downgrade possibility for M&M (volume disappointment).
Maruti’s volumes grew 12% YoY but were flattish QoQ. We expect ASP to improve QoQ due to better mix, price increase in Swift (refresh) and lower average discounts. JPY is down 7% QoQ. Maruti would derive benefit in relation to direct imports and royalty in 3Q and indirect vendor imports in 4Q, with a quarter’s lag. JPY and lower discounts will boost margins whereas low initial margin on Ciaz would be negative.
Dec-14 volumes grew by 21% YoY (-0.3% MoM) to ~109,791 units, driven by ~13% growth in domestic volumes and ~171% growth in exports. Domestic volumes grew 13% YoY to ~98,109 units. Retails for the month grew 18% YoY to ~157,000 units, driven by pre-buy in fear of excise duty increase. Compact segment (Alto, Wagon-R, Swift, Celerio, Ritz etc) grew by ~10% YoY to ~60,657 units.
As per data released by SIAM, the sales of Passenger Vehicles grew by 3.67 percent in April-December 2014 over the same period last year. Within the Passenger Vehicles segment, Passenger Cars and Utility Vehicles grew by 4.99 percent and 5.49 percent respectively.
Maruti’s volumes grew 12% YoY but were flattish QoQ. We expect ASP to improve QoQ due to better mix, price increase in Swift (refresh) and lower average discounts. JPY is down 7% QoQ. Maruti would derive benefit in relation to direct imports and royalty in 3Q and indirect vendor imports in 4Q, with a quarter’s lag. JPY and lower discounts will boost margins whereas low initial margin on Ciaz would be negative.
Dec-14 volumes grew by 21% YoY (-0.3% MoM) to ~109,791 units, driven by ~13% growth in domestic volumes and ~171% growth in exports. Domestic volumes grew 13% YoY to ~98,109 units. Retails for the month grew 18% YoY to ~157,000 units, driven by pre-buy in fear of excise duty increase. Compact segment (Alto, Wagon-R, Swift, Celerio, Ritz etc) grew by ~10% YoY to ~60,657 units.
As per data released by SIAM, the sales of Passenger Vehicles grew by 3.67 percent in April-December 2014 over the same period last year. Within the Passenger Vehicles segment, Passenger Cars and Utility Vehicles grew by 4.99 percent and 5.49 percent respectively.
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