Institutional Equities

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1 Monthly Sales Update Institutional Equities Automobile Sales-August September 2018 Mixed Performance; Commercial Vehicles Outperform Automobile sales in August 2018 showed a mixed performance with commercial vehicle OEMs reporting strong double-digit YoY volume growth and two-wheeler/car OEMs posting a mixed trend. Tractor sales, which have been growing in double digits, posted single-digit growth. Kerala floods impacted retail sales and despatches of OEMs, with the despatches of Maruti Suzuki India and Eicher Motors - which have a higher share of sales in Kerala - being impacted the most. Most passenger vehicle players and two-wheeler OEMs reported single-digit growth in sales. In twowheeler segment, Bajaj Auto reported strong growth with all-time high sales and a growth rate of 30% Other positives were strong medium and heavy commercial vehicle (MHCV) sales in case of all OEMs. As we enter the festive season, we expect the despatches of two-wheeler and car OEMs to improve in the coming months. In two-wheeler space, most players reported single-digit YoY growth in sales with market leader Hero MotoCorp reporting 1% YoY growth. Other two-wheeler OEMs like TVS Motor Company and Eicher Motors reported single-digit YoY volume growth of 8%/2%, respectively. Bajaj Auto and Suzuki Motorcycles India reported strong double-digit volume growth of 30%/31% YoY, respectively. Bajaj Auto s overall sales grew on the back of strong performance in both motorcycle and three-wheeler segments, with motorcycle segment growing 28% YoY and three-wheeler segment growing 45% In case of TVS Motor Company, motorcycles and scooters reported double-digit YoY growth while moped sales fell in double digits by 14%. TVS Motor Company s three-wheeler sales also grew by a robust 56% YoY because of strong exports. In passenger vehicle segment, market leader Maruti Suzuki India surprised with lower-than-expected sales, reporting a 3% YoY decline, being impacted by Kerala floods and heavy rainfall in a few other states in India. Other car-makers like Hyundai and Ford reported single-digit YoY growth of 3% each while Honda Cars India posted 2% YoY drop in sales. Tata Motors and Toyota Motors reported double-digit YoY growth in sales. M&M reported 15% YoY growth in automotive segment sales, with passenger car segment growing 2% YoY and commercial vehicle as well as pick-up vehicle sales rising by a strong 25% In commercial vehicle segment, sales continued their growth momentum with all companies posting strong double-digit YoY growth. MHCV sales surprised positively with Tata Motors and Ashok Leyland posting strong 27%/24% YoY growth in sales, respectively. LCV segment sales were also strong with Tata Motors and Ashok Leyland reporting robust 27%/38% YoY growth in sales, respectively. Other CV players like Volvo Eicher Commercial Vehicles (VECV) and SML Isuzu reported sales growth of 33%/38%, respectively. In tractor segment, the sales momentum moderated with both M&M and Escorts reporting single-digit YoY growth of 7%/5% YoY, respectively. Going forward, as we enter the seasonally strong sales season for two-wheeler and car sales with companies building in inventory ahead of the festive season, we believe the absolute volume will be higher compared to August 2018 and expect improvement in the overall growth rate for cars and twowheeler OEMs, Gaurant Dadwal Research Analyst gaurant.dadwal@nirmalbang.com Vivek Sarin Research Associate vivek.sarin@nirmalbang.com Exhibit 1: Automobile sales snapshot Company (units) Aug-2018 Aug-2017 YoY (%) Bajaj Auto 437, , Hero MotoCorp 685, , TVS Motor Company 343, , Royal Enfield 69,377 67, Suzuki Motorcycles India* 62,446 47, Maruti Suzuki India 158, ,701 (3.4) Hyundai Motors 61,912 59, Ford India 8,042 7, Honda Cars India* 17,020 17,365 (2.0) Toyota Kirloskar India 14,581 13, M&M - Automobiles 48,324 42, M&M - Tractors 17,785 16, Tata Motors 63,385 48, Ashok Leyland 17,386 13, VE Commercial Vehicles 6,069 4, SML Isuzu Atul Auto 4,430 4, Escorts 4,812 4, *Domestic volume; Source: Respective companies Please refer to the disclaimer towards the end of the document.

2 Domestic sales grew 27% 29% YoY, driven by by strong strong two-wheeler and three-wheeler sales. Domestic motorcycle sales continue growth to rebounds grow in double to 24% digits at 27% Commercial vehicles sales continued to to do do well, well, up 45% up 83% Exports were of up three-wheelers 35% were up sharply by 85% Sales grew just 1% YoY, but the company Overall expects two-wheeler double-digit sales growth were in the higher forth than coming estimate, festive season up 24% YoY, with motorcycle/scooter sales posting 32%/10% YoY growth, respectively. Three-wheeler sales were up by 115% Overall two-wheeler sales were up 7% Exports YoY, with post motorcycle/scooter double-digit growth sales -YoY posting growth 18%/11% of YoY 54% growth, backed respectively. by a 46% rise in two-wheeler exports. Three-wheeler sales were up 56% Exports post double-digit YoY growth of 45% driven by three-wheeler sales. Overall sales grew 14% YoY, driven by double-digit demand for compact vehicles. Ciaz car sales witness a decline of 27% Utility vehicle sales post flat 1% YoY growth. Overall sales fell 3% YoY because of floods in Kerala and heavy rainfall in other states Export sales growth rebounds to 19% Ciaz car sales witness a sharp sequential improvement after its launch last month. CIAZ sales grew 8% YoY Utility vehicle sales decline 16% Export sales decline 10% Exhibit 2: Bajaj Auto s sales Motorcycles 362, , ,725,567 1,324, Commercial vehicles 74,169 51, , , Total 437, , ,064,076 1,531, Domestic 255, , ,181, , Exports 181, , , , Exhibit 3: Hero MotoCorp s sales Motorcycles/scooters 685, , ,469,858 3,151, Exhibit 4: TVS Motor Company s sales Motorcycles 131, , , , Scooters 126, , , , Mopeds 71,657 82,865 (13.5) 356, , Two-wheelers 330, , ,530,686 1,357, Three-wheelers 13,141 8, ,984 33, Total 343, , ,592,670 1,390, Exhibit 5: Maruti Suzuki India s sales Mini- Alto, Wagon R 35,895 35, , ,248 (1.4) Compact-Swift, Ignis, Baleno, Celerio, Dzire 71,364 74,012 (3.6) 378, , Mid-size - Ciaz 7,002 6, ,769 28,532 (37.7) Passenger cars 114, ,897 (1.4) 574, , UV- S-Cross, Ertiga, Brezza 17,971 21,442 (16.2) 108, , Vans - Omni, Eeco 13,663 13,931 (1.9) 74,242 65, Total domestic sales 145, ,270 (3.6) 757, , LCV-Carry 1, ,401 2, Total exports 10,489 11,701 (10.4) 47,347 49,186 (3.7) Total sales 158, ,701 (3.4) 813, , Automobile Sales August 2018

3 Exhibit 6: M&M Automobile division s sales Utility vehicle volume declines 2% Overall passenger vehicle volume registers 2% growth. Car and van sales register healthy doubledigit growth of 74% Three-wheeler sales volume growth remains strong at 35% Overall CV sales post 25% YoY growth, while exports rise 14% Tractor sales post moderate single-digit growth of 7% Domestic CV volume up 26% YoY on the back of various macro-economic factors like investment in improved industrial activity, infrastructure development and irrigationrelated projects. Volume is expected to remain strong. Domestic passenger vehicle sales grew 26% YoY on the back of continued strong demand for Tiago, Tigor, Nexon and Hexa models. MHCV sales post double-digit growth of 25% LCV sales continue to grow, registering 38% YoY growth. Passenger vehicles 19,758 19, ,318 96, Utility vehicles 17,892 18,255 (2.0) 91,845 90, Cars + vans 1,866 1, ,473 5, Commercial vehicles 20,326 16, ,550 77, LCV < 3.5T 18,584 15, ,752 72, LCV >3.5T ,620 3, MHCVs 1, ,178 2, Three-wheelers 5,289 3, ,834 17, Domestic sales 45,373 39, , , Total exports 2,951 2, ,922 9, Total sales 48,324 42, , , Exhibit 7: M&M Tractor division s sales Domestic 16,375 15, , , Exports 1,410 1, ,939 5, Total tractor sales 17,785 16, , , Exhibit 8: Tata Motors sales PV-Domestic 39,859 31, , , CV-Domestic 18,048 14, ,792 64, Exports 5,478 3, ,926 12, Total 63,385 48, , , Exhibit 9: Ashok Leyland s sales MHCVs 13,158 10, ,801 39, LCVs 4,228 3, ,912 14, Total 17,386 13, ,713 54, Automobile Sales August 2018

4 DISCLOSURES This Report is published by Nirmal Bang Equities Private Limited (hereinafter referred to as NBEPL ) for private circulation. NBEPL is a registered Research Analyst under SEBI (Research Analyst) Regulations, 2014 having Registration no. INH NBEPL is also a registered Stock Broker with National Stock Exchange of India Limited and BSE Limited in cash and derivatives segments. NBEPL has other business divisions with independent research teams separated by Chinese walls, and therefore Aug, at times, have different or contrary views on stocks and markets. NBEPL or its associates have not been debarred / suspended by SEBI or any other regulatory authority for accessing / dealing in securities Market. NBEPL, its associates or analyst or his relatives do not hold any financial interest in the subject company. NBEPL or its associates or Analyst do not have any conflict or material conflict of interest at the time of publication of the research report with the subject company. NBEPL or its associates or Analyst or his relatives do not hold beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of this research report. NBEPL or its associates / analyst has not received any compensation / managed or co-managed public offering of securities of the company covered by Analyst during the past twelve months. NBEPL or its associates have not received any compensation or other benefits from the company covered by Analyst or third party in connection with the research report. Analyst has not served as an officer, director or employee of Subject Company and NBEPL / analyst has not been engaged in market making activity of the subject company. Analyst Certification: I/We, Gaurant Dadwal, the research analysts and Vivek Sarin, the research associate are the author of this report, hereby certify that the views expressed in this research report accurately reflects my/our personal views about the subject securities, issuers, products, sectors or industries. It is also certified that no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst(s) principally responsible for the preparation of this research report and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. 4 Automobile Sales August 2018

5 Disclaimer Stock Ratings Absolute Returns BUY > 15% ACCUMULATE -5% to15% SELL < -5% This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. NBEPL is not soliciting any action based upon it. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any such transaction. In preparing this research, we did not take into account the investment objectives, financial situation and particular needs of the reader. This research has been prepared for the general use of the clients of NBEPL and must not be copied, either in whole or in part, or distributed or redistributed to any other person in any form. If you are not the intended recipient you must not use or disclose the information in this research in any way. Though disseminated to all the customers simultaneously, not all customers Aug receive this report at the same time. NBEPL will not treat recipients as customers by virtue of their receiving this report. This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject NBEPL & its group companies to registration or licensing requirements within such jurisdictions. The report is based on the information obtained from sources believed to be reliable, but we do not make any representation or warranty that it is accurate, complete or up-to-date and it should not be relied upon as such. We accept no obligation to correct or update the information or opinions in it. NBEPL or any of its affiliates or employees shall not be in any way responsible for any loss or damage that Aug arise to any person from any inadvertent error in the information contained in this report. NBEPL or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations. This information is subject to change without any prior notice. NBEPL reserves its absolute discretion and right to make or refrain from making modifications and alterations to this statement from time to time. Nevertheless, NBEPL is committed to providing independent and transparent recommendations to its clients, and would be happy to provide information in response to specific client queries. Before making an investment decision on the basis of this research, the reader needs to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs, objectives and financial circumstances. There are risks involved in securities trading. The price of securities can and does fluctuate, and an individual security Aug even become valueless. International investors are reminded of the additional risks inherent in international investments, such as currency fluctuations and international stock market or economic conditions, which Aug adversely affect the value of the investment. Opinions expressed are subject to change without any notice. Neither the company nor the director or the employees of NBEPL accept any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. Here it Aug be noted that neither NBEPL, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profit that Aug arise from or in connection with the use of the information contained in this report. Copyright of this document vests exclusively with NBEPL. Our reports are also available on our website Access all our reports on Bloomberg, Thomson Reuters and Factset. Team Details: Name Id Direct Line Rahul Arora CEO rahul.arora@nirmalbang.com - Girish Pai Head of Research girish.pai@nirmalbang.com / 18 Dealing Ravi Jagtiani Dealing Desk ravi.jagtiani@nirmalbang.com , Pradeep Kasat Dealing Desk pradeep.kasat@nirmalbang.com /8101, Michael Pillai Dealing Desk michael.pillai@nirmalbang.com /8103, Nirmal Bang Equities Pvt. Ltd. Correspondence Address B-2, 301/302, Marathon Innova, Nr. Peninsula Corporate Park, Lower Parel (W), Mumbai Board No. : /1; Fax. : Automobile Sales August 2018

Institutional Equities

Monthly Sales Update Institutional Equities Automobile Sales-May 2018 4 June 2018 Growth Momentum Continues Automobile sales in May 2018 were strong across segments, except in case of a few companies.