Two-wheelers drive overall volumes!

Transcription

1 s MotoGaze March 218 Sector View Overweight Volume performance for February 218 Company Gr. YoY Hero Motocorp 2. Bajaj Auto 3.8 TVS Motors 38.1 Maruti Suzuki 15. Tata Motors 34. Ashok Leyland 29.2 Mahindra and Mahindra 19.7 Key players & industry volume growth February 18 Industry HMCL BAL TVS HMSI Maruti TML M&M Hyundai ALL Key players & industry volume growth YTDFY18 Industry HMCL BAL TVS HMSI Maruti TML M&M Hyundai ALL Research Analyst Nishit Zota 7.7 Vidrum Mehta YTDFY MoM YoY Two-wheelers drive overall volumes! March 28, 218 Overall auto volumes continued their strong growth momentum (primarily on account of low base), up 23.2% YoY for February 218. All segments reported healthy volume growth. The 2-W segment (that accounts for ~79% of overall auto volumes) reported robust volume growth of 24.5% YoY, thereby driving overall auto volumes. The growth of the segment was driven by both scooter & motorcycle segment, which grew 24.6%, 26.8% YoY, respectively mainly on account of low base (demonetisation). CV volumes grew 29% YoY. Growth was driven by the LCV segment (up 36.7% YoY) mainly due to increase in demand from e-commerce & container and refrigerator vehicles. M&HCV segment grew 19.9% YoY mainly after stricter implementation of overloading in some states and revival in infrastructure development. The 3-W segment reported strong growth of 78.9% YoY as domestic 3-W volume grew 76.7% YoY mainly due to 1) discontinuance of permits in Maharashtra, 2) new permits released in Delhi and 3) replacement of two-stroke to four-stroke engine in Bengaluru. The 3-W exports also continued to witness a strong demand revival with volumes up 83.3% YoY. The PV segment reported decent volume growth of 6.1% YoY, primarily driven by MSIL, the market leader in the space, which reported strong volume growth of 15% YoY. Domestic tractor volumes grew 38.6% YoY to 47,87 units. MSIL dominates PV space; Bolero enters top 1 PV lists MSIL continues to dominate the PV industry. For February 218, its six models featured in the list of top 1 selling PVs in India. The new Swift has received a good response from consumers. For February 218, it clocked volumes of 17,291 units. According to media reports, the new Swift has crossed 1, bookings while its waiting period is more than eight weeks. MSIL s other models viz. Baleno & Brezza continue to post healthy volume of 15,87 units & 11,62 units, respectively. Hyundai India s three models viz. Elite i2, Grand i1 & Creta also hold their place in the list of top selling PVs in India. Further, M&M s Bolero entered the highest selling PV list at the tenth place and reported volume of 8,1 units. On a YTDFY18 basis, Bolero has reported an exceptional performance in its UV portfolio (volume up 25.8% YoY). In the 2-W space, Activa & Splendor are top selling brands with volumes of 247,377 & 238,722 units, respectively. Long term story intact The higher focus on rural & infrastructure development in Budget 218 will favour the auto space. The auto industry weathered key structural events like implementation of BS IV norms and GST, with its volumes recovering, up 14.1% in YTDFY18. Overall 2-W, PV, CV volume growth was at 15.2%, 6.1% YoY, 14.9% YoY, respectively, in YTDFY18. We expect the strong growth momentum to continue in FY19E (expect ~1% growth). The government s focus on the rural economy will aid the demand for 2-W players in key under penetrated agrarian states. A buoyant outlook on infrastructure spending & pre-buying ahead of BS VI migration is expected to catalyse M&HCV growth. For February 218, the BSE Auto Index was down ~5% in line with the benchmark index. The pace of electric vehicle (EV) adoption and BS-VI implementation by 22 is expected to lead to huge investments & partnership in R&D. We believe the major OEMs business will adopt the new technology smoothly. However, ancillary companies producing internal combustion engine related parts are expected to face challenges. The new technology can prove to be a threat to the incumbent in the battery space, with new players and OEMs entering the space. In our I- direct auto coverage, we remain bullish on frontline OEM stocks like Maruti Suzuki and Eicher Motors.

2 Overall 2-W segment volumes grew 24.5% YoY in February 218. Over last year, HMSI has outperformed the 2-W industry growth, thereby expanding its market share by 18 bps YoY to 29%. On the other hand, HMCL continues to enjoy a dominant position with share of 36.2%. With the underperformance on a YTDFY18 basis, BAL has lost market share of ~17 bps YoY to 9.8% Motorcycle, scooters both drive two wheeler volumes! For February 218, overall 2-W volumes grew 24.5% YoY, supported by both motorcycle & scooter segments, which grew 24.6% & 26.8% YoY, respectively. Overall 2-W domestic volumes grew 23.8% YoY while exports volumes grew 29.8% YoY. In terms of players, the top two - HMCL & HMSI reported strong volume growth of 2% YoY & 32% YoY, respectively. The other 2-W players viz. TVS & BAL (third & fourth largest player) reported volume growth of 36.9% YoY & 21.5% YoY, respectively. The 3-W volumes grew 78.9%, supported by a revival in export volume (up 83.3% YoY) and higher demand in domestic market (up 76.7% YoY), mainly due to discontinuance of permits in Maharashtra, new permits released in Delhi and replacement of two-stroke to four-stroke engine in Bengaluru. Domestic tractor industry volumes grew 38.6% YoY to 47,87 units & 19.4% YoY to 638,191 units for February 218 & YTDFY18, respectively. Market share movement According to data released by the Society of Indian Automobile Manufacturers (Siam), the domestic market share of two and threewheeler players as of February 218 is mentioned below. Exhibit 1: Domestic market share movement in two-wheelers Jan , Data used is YTD Bajaj Auto Hero MotoCorp TVS Motors HMSI Others Exhibit 2: Domestic market share movement in three-wheelers In February 218, domestic 3W volumes grew 78.9% YoY, mainly supported by market leader Bajaj Auto, which reported strong volume growth of 116.1% YoY, thereby gaining market share by 79 bps YoY to 57.7% Others M&M Piaggio Bajaj Auto Jan , Data used is YTD Page 2

3 Overall motorcycle volumes increased 26.8% YoY in February 218. HMCL continues to be the market leader in the space with a share of ~51% Exhibit 3: Domestic market share movement in motorcycles 7 Jan Bajaj Auto Hero Motocorp TVS motor Honda Source: Company, ICICIdirect.com Research Overall scooter volumes grew 24.6% YoY in February 218. HMSI maintained its leadership position in scooters with market share of ~57% YoY. TVS also reported strong growth of 35.6% YoY; thereby expanding its market share by 16 bps YoY to 16.1% Exhibit 4: Domestic market share movement in scooters/scooters 7 Jan Hero Motocorp TVS Motors Honda Others, Data used is YTD Page 3

4 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 HMCL continues to dominate the executive motorcycle segment (<=125 cc) in India with a market share of ~59%. HMSI s volumes have been more volatile thereby resulting in wide fluctuation in its market share in the last 12 months Exhibit 5: Market share movement in executive motorcycle (<125 cc) segment* Bajaj Auto (RHS) Hero Motocorp (LHS) TVS (RHS) HMSI (RHS) * only top four two-wheeler OEMs BAL continues to dominate the executive motorcycle segment (<=125 cc) in India with market share at ~55%. HMSI s volumes have been more volatile thereby resulting in wide fluctuation in its market share in the last 12 months Exhibit 6: Market share movement in motorcycle greater than 125 cc segment Bajaj Auto (LHS) Hero Motocorp (RHS) TVS (RHS) HMSI (RHS) *only top three vehicle two-wheeler OEMs Page 4

5 ('s) Oc t-17 Dec ('s) ('s) Hero MotoCorp: Sales volumes Motorcycles Scooters Hero MotoCorp (HERHON) Hero MotoCorp s (HMCL), the market leader in the 2-W space, volume grew 2% YoY to 629,597 units. Its motorcycle & scooter volume grew 21.1% YoY & 12.6% YoY, respectively Its top selling model Splendor volume grew 16% YoY. HF Deluxe & Glamour reported strong volume growth of 37.6% YoY & 67.3% YoY, respectively. Among its scooter portfolio, volumes of Maestro & Pleasure grew 12.4% YoY & 38.3% YoY, respectively, while volumes of Duet declined 4% YoY HMCL, to revive its focus on the growing premium motorcycle segment, unveiled all new Xtreme 2R and will be across dealership from April 218. The management expects HMCL to maintain its strong growth trajectory, going forward Exhibit 7: Volume performance (in units) Segment %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg Motorcycles 556,16 459, , ,29,32 5,297, Scooters 73,581 65, , , , Total Sales 629, , , ,856,696 6,54, Export(inc. above) 24,242 12, , , , Exports (% of sales) bps bps bps Source: Company, Siam Bajaj Auto: Sales volumes Bajaj Auto (BAAUTO) Bajaj Auto s (BAL) 2-W volumes grew 21.5% YoY, driven by both exports & domestic volumes, which were up 18.9% YoY & 23.3% YoY, respectively. On a YTDFY18 basis, its domestic volumes declined 1.9% YoY resulting in a significant loss of market share (down 17 bps YoY) in the 2-W space to 9.8%. In all likelihood HMSI will displace BAL to be the 2 nd largest motorcycle player. Pulsar volumes grew 8.4% YoY to 8,742 units (driven by 15-2 cc category). Volumes of its entry level segment (75-11 cc), which includes brands like CT, Platina, Boxer & Discover, grew 44.5% YoY to 154,514 units. This was mainly due to strong exports growth in Boxer & domestic growth in Discover. Volumes of CT declined 22.6% YoY while Platina volumes grew 66.1% YoY. Volumes of V15 & V12 declined 41.1% YoY to 5,624 units & 9% YoY to 687 units. Overall volumes of Dominar were at 3,532 units Two-Wheelers Three-Wheelers % exports Its overall 3-W volumes grew 111.4% YoY after domestic volumes grew 129.1% YoY driven by discontinuance of permits in Maharashtra, new permits released in Delhi and replacement of two-stroke to four-stroke engine in Bengaluru. In the domestic 3-W market, BAL has gained market share by 79 bps YoY to 57.7%. The revival in the export market lifted its volumes up 86.1% YoY Exhibit 8: Volume performance (in units) Segment %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg Total 2-wheeler sales 297, , , ,99,395 2,975, W exports 122,25 12, , ,283,85 1,125, W domestic sales 175, , , ,815,59 1,849, Total 3-wheeler sales 6,369 28, , ,48 417, W exports 21,835 11, , ,24 181, w domestic sales 38,534 16, , ,24 235, Total Sales 357, , , ,672,443 3,392, Total Domestic Sales 214,23 159, , ,14,614 2,85, Total Exports 143,86 114, , ,531,829 1,37, Exports as % of sales bps bps bps Source: Company, Siam Page 5

6 ('s) ('s) TVS Motors: Sales volumes Motorcycles Scooters Mopeds TVS Motors (TVSMOT) TVS volumes (2-W+3-W) for February 218 came in at ~2.9 lakh units, up 38.1% YoY. The 2-W volumes grew 36.9% YoY while 3- W volumes grew 86.3% YoY Motorcycle segment volumes grew 95.5% YoY to 113,296 units. Volumes of Apache & Star City (family) grew 95.1% YoY to 42,85 units & 81.4% YoY to 41,785 units. Volumes of Sport grew 17.1% YoY to 15,498 units. Its scooter volumes grew 35.6% YoY to 93,573 units. This was after overall volumes of Jupiter grew 23.5% YoY to 64,182 units. Volumes of Zest & Pep+ grew 198.1% YoY to 6,9 units & 1.4% YoY to 11,326 units. Volumes of its newly launched Ntorq were at 8,39 units. On the flip side, Wego volumes declined 21.4% YoY to 3,747 units. Its moped volumes declined 5.3% YoY at 74,73 units Export volumes grew 57.6% YoY to 58,564 units as 2-W & 3-W volumes grew 55.2% YoY to 5,589 units & 74.2% YoY to 7,975 units, respectively Exhibit 9: Volume performance (in units) Segment %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg Motorcycles 113,296 57, , ,221, , Scooters 93,573 69, , ,33, , Mopeds 74,73 78, , , , Total 2-W Sales 28,942 25, , ,51,661 2,65, Wheelers 9,731 5, , ,79 63, Total Sales 29,673 21, , ,139,451 2,669, Exports(incl. in above) 58,564 37, , , , Exports as % of sales Domestice sales 232,19 173, , ,629,33 2,284, Source: Company, Siam HMSI: Motorcycles & scooter sales volumes Moto rcyc le s Sco oters Honda Motorcycles & Scooters India (HMSI) For February 218, HMSI s overall volumes grew 32% YoY to 519,782 units. This was after domestic motorcycle & scooter volume grew 36.8% YoY & 3.1% YoY, respectively Domestic motorcycles volumes grew 36.8% YoY as volumes of CB Shine grew 21.7% YoY to 83,736 units. Domestic volumes of Dream & Livo grew 83.8% YoY to 3,141 units & 424.4% YoY to 15,486 units, respectively. Domestic scooter volumes grew 39.6% YoY, after Activa volumes grew 13.4% YoY to 243,826 units. Volumes of Dio grew 93.6% YoY to 41,556 units. Volumes of Aviator grew 6.4% YoY to 1,862 units. The newly launched CLIQ & Grazia volumes were at 1,169 units & 23,62 units, respectively, in February 218 Export volumes grew 28.2% YoY to 3,144 units, mainly after scooter volumes, grew 49.6% YoY to 17,39 units. Its export share was at 5.8% of sales Exhibit 1: Volume performance (in units) Segment %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg Motorcycles 164,434 12, , ,81,576 1,459, Scooters 325,24 249, , ,556,557 2,943, Total Sales 519, , , ,683,613 4,642, Exports(incl.above) 3,144 23, , ,48 255, Exports as % of sales bps bps bps Domestice sales 489,638 37, , ,358,133 4,386, Source: Company, Siam Page 6

7 PV segment reports modest growth The overall passenger vehicles segment grew 6.1% YoY to 335,87 units for February 218. Domestic PV volumes grew 7.8% YoY to 275,329 units while exports volumes declined 1% YoY to 6,478 units. Within the subsegment, the utility vehicle (UVs) segment reported healthy growth of 2.4% YoY to 93,396 units, driving overall PV volumes. Volumes of the car segment reported marginal growth of 1.9% YoY to 226,322 units while that of vans declined 4.8% YoY to 16,89 units. MSIL is the market leader and continues to outperform (overall volumes grew 15% YoY to 149,824 units) the overall passenger vehicle space. For February 218, the UV1 sub-segment grew 23% YoY to 68,996 units, driven by Honda Car s (WR-V) volumes were at 3,376 units while Tata Motor s (Nexon) volumes were at 4,337 units. MSIL s Vitara Brezza s overall volumes grew 15.8% YoY to 11,674 units. The facelift of S-Cross lifted its volumes to 4,17 units vs. 2,651 units in February 217. Volumes of Gypsy were at 59 units vs. 16 units in January 217. Hyundai s Creta volumes grew 13.6% YoY to 12,946 units. Volumes in the UV2 space declined 5.9% YoY to 16,34 units. Toyota Innova s volumes grew.9% YoY to 6,129 units. Honda s BR-V declined 11.4% YoY to 942 units. Aggregate volumes of M&M s models in the UV2 category (viz. Scorpio, Bolero Plus, Xylo, XUV5OO) increased.3%yoy to 8,87 units. The segment was impacted after General Motors stopped selling vehicles in India (Enjoy & Tavera total volume was at 75 units in February 217). Commercial vehicle volumes grew 29% YoY to 96,32 units, as M&HCV volumes grew 19.9% YoY to 4,889 units & LCV volume grew 36.7% YoY to 55,431 units. M&HCV volumes were driven by increase in restrictions on overloading and pick-up in infrastructure projects while LCV volumes were aided by an increase in demand from e-commerce sector and also due to higher demand from container & refrigerator vehicles. The MHCV/LCV volume ratio was at 42:58 in February 218 vs. 28:72 in April 217 vs. the average ratio 41:59 over the past 36 months. Market share movement According to Siam, the domestic market share for passenger vehicles (PV) and commercial vehicles (CV) in February 218 was as follows: Exhibit 11: Domestic market share movement in passenger vehicles MSIL continues to dominate the PV segment with market share of 5% in February 218 Others Honda Cars M&M Tata Motors Hyundai Maruti 14.6 Jan , Data used is YTD * passenger vehicles as per Siam include Vans like Gio, Maxximo, Eeco, Ace Page 7

8 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Exhibit 12: Market share movement in A2 segment The A2 (Mini & Compact) segment is the bread & butter category of the passenger car segment. The segment witnessed a demand revival, with volumes up 8.9% YoY on a YTDFY18 basis, primarily supported by market leader MSIL, which grew 17.2% YoY in the same segment Hyundai Maruti, Top two PV OEMs considered M&HCV & LCV volumes increased 19.9% YoY & 36.7% YoY, respectively, in February 218. Thus, overall CV volumes grew 29% YoY Tata Motors continues to be the market leader in the overall CV space with market share of ~44%. It is followed by M&M with market share of ~26% in January 218 Exhibit 13: Domestic market share movement in commercial vehicles Jan ALL M&M Tata Motors Others Data used is YTD The MHCV/LCV ratio was at 42:58 in February 218 vs. 28:72 in April 217, after M&HCV volumes sharply recovered from July 217 onwards. Average M&HCV volumes (in the past 36 months) has been ~41% of total CV sales Exhibit 14: Segmental share in CVs M&HCV LCV Page 8

9 13 16 ('s) Feb'17 Mar'17 Apr'17 May'17 June'17 July'17 Aug'17 Sept'17 Oct'17 Nov'17 Dec'17 Jan'18 Feb'18 (% share of total volumes) ('s) ('s) Tata Motors: Domestic sales volume CV Sa les PV Sales Source: Company, ICICIdirect.com Research Jaguar Land Rover sales volume % Jaguar % LR JLR total volumes(rhs) Source: Company, ICICIdirect.com Research Tata Motors (TATMOT) Tata Motors overall standalone volumes increased 34% YoY to 63,761 units, backed by its domestic CV & PV segment, which grew 43.5% YoY & 27.3% YoY, respectively Domestic M&HCV volumes increased 26% YoY to 18,944 units while LCV volumes grew 62.7% YoY to 22,278 units driven by 1) restrictions on overloading; 2) pick-up in infrastructure projects, 3) increase in demand from e-commerce; 4) higher demand from container & refrigerator vehicles & 5) higher replacement demand. On the PV side, volumes of Tiago & Tigor were at 6,711 units & 2,876 units, respectively. Within its UV portfolio, volumes of Hexa (launched in January 217) & Nexon (launched in September 217) were at 9 units & 4,337 units, respectively, in February 218 JLR s wholesale volumes grew 4.3% YoY at 56,95 units. Jaguar volumes grew.9% YoY to 16,245 units. Land Rover volumes grew 5.7% YoY to 4,66 units. We believe the Chinese market would have largely supported the overall growth Exhibit 15: Volume performance (in units) Segment %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg Domestic MHCV 18,944 15, , , , Domestic LCV 22,278 13, , ,44 142, Domestic Pass.Car Sa 11,653 11, , , ,5 1.2 Domestic UV 6,118 2, , ,138 14, Exports 4,768 4, , ,689 53, Total Sales 63,761 47, , ,95 437, Jaguar 16,245 16, , , , Landrover 4,66 38, , ,91 37, Total JLR Sales 56,95 54, , , ,1 5.3 Source: Company, Siam Maruti Suzuki India (MARUTI) Maruti Suzuki s (MSIL) volumes grew 15% YoY to 149,824 units Maruti Suzuki India: Sales volumes Total Sa les Ex port % Volumes of its domestic mini car segment grew 2.1% YoY, as volumes of Alto & Wagon R grew 3.5% YoY & 1.2% YoY, respectively. Domestic volumes of Baleno & Vitara Brezza were at 15,87 & 11,62 units, respectively. DZire s (domestic) volumes stood at 17,784 units. New Swift clocked volumes of 17,291 units. Export volumes grew 24.9% YoY to 11,924 units MSIL has commissioned a study to gauge the requirement of potential customers as it embarks on the journey to bring on road affordable electric vehicle by 22 Exhibit 16: Volume performance (in units) Segment %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg Omni, Eeco,Versa 12,425 14, , ,448 14,381.8 Alto, Wagon-R, Zen, Swift,Ritz, Celerio, Dzire,Baleno 99,2 8, , ,69,262 97, SX4, Swift Dzire Tour, Ciaz 4,897 8, , ,592 9, Total Passengers 116,324 12, , ,265,32 1,138, Gypsy, Vitara,Ertiga,Brezza 2,324 17, , , , Total Domestic 136,648 12, , ,496,297 1,315, LCV (Super Carry) 1, NA 1,411 NA 8, NA Exports 11,924 9, , ,58 112, Total Sales 149,824 13, , ,618,976 1,428, Exports as % of sales Source: Company, Siam. Page 9

10 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 ('s) Mar-17 May-17 Jul-17 Sep-17 Oc t-17 Nov-17 Ja n-18 ('s) Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan ('s) Ashok Leyland: Total sales Ashok Leyland (ASHLEY) Ashok Leyland s (ALL) volumes grew 29.2% YoY to 18,181 units, as M&HCV volumes grew 21.2% YoY to 13,726 units. Its LCV segment grew 62.7% YoY to 4,455 units. On a YTDFY18 basis, its M&HCV market share has improved 55 bps YoY to ~34% YoY 1 5 Volumes of M&HCV passenger declined 6.9% YoY to 1,757 units while M&HCV goods volumes grew 26.8% YoY to 11,969 units. Exports grew 16.5% YoY, with overall share at 5.3% of sales M&HCV LCV ALL aims to diversify its business with focus on 1) LCV aiming to launch one product per quarter; 2) Exports plans to increase export revenue to >3% from the current <1%; 3) Aftermarket aims to increase higher margin aftermarket business; 4) Defence aims to increase its revenue by 1x (from the current revenue of ~ 5 crore to 5, crore, going forward) Exhibit 17: Volume performance (in units) Segment Mar-17 %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg M&HCV Passenger 1,757 1, , ,941 2, M&HCV Goods 11,969 9, , ,434 77, LCV 4,455 2, , ,23 28, Passenger Vehicles - NA NA - - NA Total Sales 18,181 14, , , , Exports , ,319 1, Exports as % of sales Source: Company, Siam Mahindra and Mahindra: Sales volume Mahindra and Mahindra (MAHMAH) M&M s overall automotive volumes grew 19.7% YoY to 51,127 units. Its core domestic UV volumes grew 7.4% YoY to 2,977 units. Overall volumes of Bolero (family) grew 24.4% YoY to 8,82 units. Volumes of TUV3OO grew 6.7% YoY to 2,523 units while KUV1OO volumes declined 14.6% YoY to 2,561 units. Volumes of Scorpio increased 4.5% YoY to 5,72 units while volumes of XUV5OO declined 14.8% YoY to 2,118 units 2 1 M&M s tractor volumes grew 36.5% YoY to 2,483 units. Domestic tractor industry volumes grew 38.6% YoY to 47,87 units & 19.4% YoY to 638,191 units for February 218 & YTDFY18, respectively Mahindra and Mahindra: Tractor sales Exhibit 18: Volume performance (in units) Segment %chg Jan-18 %chg YTDFY'18 YTDFY17 %chg UV s 2,977 19, , , , Wheeler pickups 19,225 15, , , , M & HCV 1,721 1, , ,781 12, Total 4wheeler Sales 43,335 36, , , , Wheeler 5,138 3, , ,23 47, Total Domestic Auto Sales 48,473 4, , , , Exports 2,654 2, , ,83 34, Total Auto Sales 51,127 42, , , , Exports as % of sales Tractors - Domestic 19,28 13, , ,976 23, Exports 1,23 1, , ,13 13, Total Tractors 2,483 15, , ,16 243, Exports as % of sales Source: Company, Siam Page 1

11 Top domestic model wise volumes for February 218 Exhibit 19: Top 1 passenger vehicle Models sold in India (in units) S.No. Models Models 1 Alto 19,524 Alto 19,76 2 DZIRE TOUR 16,613 DZIRE 17,784 3 Wagon R 13,555 Swift 17,291 4 Grand i1 12,862 Baleno 15,87 5 Swift 12,328 Wagon R 14,29 6 Elite i2 1,414 Elite i2 13,378 7 VITARA BREZZA 1,46 VITARA BREZZA 11,62 8 Kwid 9,648 Grand i1 1,198 9 Creta 9,2 Creta 9,278 1 Celerio 8,315 Bolero 8,1 Exhibit 2: Top 1 two-wheelers Models sold in India (in units) S.No. Models Models 1 Activa 217,98 Activa 247,377 2 Splendor 28,571 Splendor 238,722 3 HF Deluxe 121,92 HF Deluxe 165,25 4 TVS XL Super 77,53 CB Shine 82,189 5 Passion 69,763 TVS XL Super 71,931 6 CB Shine 66,42 Glamour 66,64 7 Pulsar 53,932 Jupiter 63,534 8 Jupiter 51,817 Passion 61,895 9 Classic 35 4,768 Pulsar 6,772 1 Glamour 39,288 Classic 35 48,557 Page 11

12 Upcoming 2-Ws & 4-Ws in India Exhibit 21: Upcoming OEM wise 2-Ws and 4-Ws in India S.No. OEM Bramd / Model Launch Date 1 Maruti Suzuki Vitara Apr-18 2 Maruti Suzuki New Ertiga Jun-18 3 Maruti Suzuki Jimmy Dec-19 4 Hyundai New Eon Apr-18 5 Hyundai i2 Sport Jun-18 6 Hyundai Kona Nov-18 7 Mahindra & Mahindra New XUV5OO Aug-18 8 Honda Cars Honda Civic Mar-18 9 Honda Cars Amaze Jun-18 1 Honda Cars Honda CR-V Mar Hero Motocorp Dare 125 Mar Hero Motocorp Hatsur Mar Hero Motocorp Xtreme 2R Apr Hero Motocorp Xpluse Jun Hero Motocorp Duet-E Nov Hero Motocorp Duet 125 Nov Hero Motocorp Maestro Edge 125 Dec TVS Motors Dazz Mar Eicher Motors Continental GT 65 Jun-18 Source: Company, ICICIdirect.com Research, Autondtv Page 12

13 U.P. Maharashtra Tamil Nadu Andhra Pradesh Gujarat Karnataka Bihar Madh. Prad. Rajasthan West Bengal Maharashtra U.P. Gujarat Kerala Karnataka Tamil Nadu Delhi Haryana Rajasthan Telangana State wise sales mix for 9MFY18 (April December 217) State wise market share of PV for 9MFY18 Exhibit 22: Top 1 state wise PV volume for 9MFY18 (in units) Others 3% Maharasht ra 11% U.P. 8% Gujarat 9% MFY18 (units) 9MFY17 (units) YoY growth % Telangana 4% Rajasthan 5% Haryana 5% Delhi 6% Tamil Nadu 7% Kerala 8% Karnataka 7% State wise market share of 2-W for 9MFY18 U.P., 13% Exhibit 23: Top 1 state wise 2-W volume for 9MFY18 (in units) 9MFY18 (units) 9MFY17 (units) YoY growth % Others, 29% West Bengal, 5% Rajasthan, 6% Madh. Prad., 5% Bihar, 5% Karnataka, 6% Maharashtra, 1% Andhra Pradesh, 6% Gujarat, 7% Tamil Nadu, 8% Page 13

14 Gujarat Maharashtra Karnataka Andhra Pradesh Telangana U.P. Kerala Bihar Tamil Nadu Madh. Prad Maharashtra U.P. Tamil Nadu Rajasthan Karnataka Andhra Pradesh Gujarat Haryana West Bengal Assam State wise sales mix for 9MFY18 (April December 217) State wise market share of CV for 9MFY18 Exhibit 24: Top 1 state wise CV volume for 9MFY18 (in units) Others 3% Assam 4% West Bengal 5% Haryana 6% Gujarat 6% Andhra Pradesh 6% Maharashtra 13% U.P. 9% Karnataka 7% Rajasthan 7% Tamil Nadu 7% MFY18 (units) 9MFY17 (units) YoY growth % State wise market share of 3-W for 9MFY18 Others, 22% Madh. Prad., 4% Tamil Nadu, 5% Bihar, 6% Kerala, 5% U.P., 6% Gujarat, 9% Maharashtra, 23% Karnataka, 7% Andhra Pradesh, 7% Telangana, 6% Exhibit 25: Top 1 state wise 3-W volume for 9MFY18 (in units) 9MFY18 (units) 9MFY17 (units) YoY growth % Page 14

15 RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Sector view: Overweight compared to index Equal weight compared to index Underweight compared to index Index here refers to BSE 5 Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 4 93 research@icicidirect.com Page 15

16 ANALYST CERTIFICATION We /I, Nishit Zota, MBA (Finance) and Vidrum Mehta, MBA (Finance) Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a Sebi registered Research Analyst with Sebi Registration Number INH99. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. ( associates ), the details in respect of which are available on ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances. This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving Nishit Zota, MBA (Finance) and Vidrum Mehta, MBA (Finance) this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report. It is confirmed that Nishit Zota, MBA (Finance) and Vidrum Mehta, MBA (Finance) Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. It is confirmed that Nishit Zota, MBA (Finance) and Vidrum Mehta, MBA (Finance) Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report. We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. The company has been received a mandate from Mahindra and Mahindra. The report is prepared based on publicly available information. Page 16