s MotoGaze May 218 Sector View Overweight Volume performance for April 218 Company Gr. YoY Hero Motocorp 16.5 Bajaj Auto 25.9 TVS Motors 23.7 Maruti Suzuki 14.4 Tata Motors 82.5 Ashok Leyland 78.8 Mahindra and Mahindra 22.2 Key players & industry volume growth April 18 Industry HMCL BAL TVS HMSI Maruti TML M&M Hyundai ALL -43.5-25.8-22.5-5. -6.7-1.3 7.5 18.4 16.5 24.2 25.9 23.7 17.8 7.7 14.4 6. 22.2 Key players & industry volume growth FY18 Industry HMCL BAL TVS HMSI Maruti TML M&M Hyundai ALL Research Analyst 2. 9.3 Nishit Zota nishit.zota@icicisecurities.com 8.1 Vidrum Mehta vidrum.mehta@icicisecurities.com 13.9 14.5 13.4 17.8 54.8 18.5 78.8 FY18 2.5 MoM YoY 22.3 82.5 Strong growth momentum continues! May 28, 218 Overall auto volumes continued their strong growth momentum, up 18.4% YoY for April 218. The healthy double digit growth (>18% YoY) continued for a sixth consecutive month, with average monthly volume growth at ~25% YoY over November 217-April 218. All segments reported positive growth, with 2-W volumes up 18.1% YoY. Motorcycle volumes (up 19.4% YoY) outpaced scooter volumes (up 15.2% YoY) on the back of a strong demand revival from the rural space & positive consumer sentiments on account of marriage season. The top two players, HMCL & HMSI, reported decent growth of 16.5% YoY & 17.8% YoY, respectively. CV volumes grew 73.8% YoY, after M&HCV & LCV volumes grew 144.2% YoY & 46.2% YoY, respectively. Apart from current demand drivers like: 1) overloading restriction, 2) higher infrastructure activity, 3) increase in demand for e-commerce space for container & refrigerator vehicles, we believe volumes look higher mainly due to the low base of last year (April 217) impacted by transition from BS III to BS IV emission norms. The 3-W volumes grew 69.4% YoY, driven by domestic volumes (up 54.2% YoY attributable to favourable industry development) & export volumes (up 88.2% YoY, witnessing a demand revival). The PV space reported moderate growth of 3.3% YoY, driven by utility vehicle (UVs) volumes up 1.6% YoY. MSIL, the market leader in the PV space, continued to outperform and was up 14.4% YoY. Tractor volumes remained upbeat, up 18.9% YoY in April 218, backed by a revival in rural sentiment along with higher use in the non-agriculture space. The strong demand momentum will continue in the medium term. MSIL dominates PV space; Swift moves to top while Alto slips to third! In terms of models, for April 218, MSIL continues to dominate PV industry, with seven of its model featured in the top 1 selling PVs in India. Its models viz. Swift & DZire top the charts in terms of highest selling PV with 22,776 units & 21,41 units, respectively. Alto, which usually holds first place moved to third with volumes at 21,233 units. Other models of MSIL include names like Baleno, Wagon R, Brezza & Celerio. Hyundai s three models viz. Elite i2, Grand i1 & Creta make their place in the top 1 highest selling PV in India. In the 2-W space, Activa & Splendor are top selling brands with volumes of 339,878 & 266,67 units, respectively. Long term story intact We expect the strong growth momentum to continue in FY19E (~1% growth). The government s focus on the rural economy will aid demand for 2-W in key underdeveloped states. Further, the government s mandate of ABS (>125 cc) & CBS (<125 cc) in 2-W will increase its cost, resulting in some-pre-buying. A buoyant outlook on infrastructure spending and stricter implementation of over-loading restriction will catalyse M&HCV growth. We believe the industry will witness pre-buying (in 2-W & CV) ahead of implementation of BS VI norms by 22. For April 218, the BSE Auto Index was up ~7.4% outperforming the benchmark index that declined 6.6%. 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.
Overall 2-W segment volumes grew 18.1% YoY in April 218. HMCL continues to enjoy a dominant position with a share of 34.6%. With outperformance in April 218, BAL has increased its market share by 6 bps YoY to 1.3% Motorcycle drives two wheeler volumes! For April 218, overall 2-W volumes grew 18.1% YoY, supported by the motorcycle segment, which grew 19.4% YoY mainly due to higher demand from the rural India and also on account of marriage season. The motorcycle volume recovered sharply & outperformed the scooter segment that grew 15.2% YoY in April 218. Further, the moped segment reported volume growth of 21.4% YoY to 72,469 units. In terms of players, the top two - HMCL & HMSI reported volume growth of 16.5% YoY & 17.8% YoY, respectively. Other 2-W players viz. TVS & BAL (third & fourth largest player) reported volume growth of 21.7% YoY & 18.9% YoY, respectively. The 3-W volumes grew 69.4%, supported by a revival in export volume (up 88.2% YoY) and higher demand in the domestic market (up 54.2% YoY), mainly due to discontinuance of permits in Maharashtra, new permits released in Delhi & replacement of two-stroke to four-stroke engine in Bengaluru. Domestic tractor industry volumes grew 18.9% YoY to 65,283 units in April 218 & 22.1% YoY to 711,478 units FY18. Market share movement According to data released by the Society of Indian Automobile Manufacturers (Siam), the domestic market shares of two and threewheeler players as of April 218 are mentioned below. Exhibit 1: Domestic market share movement in two-wheelers 4 35 3 36.6 35. 34.6 Mar-18 32.9 28.6 32.5 25 2 15 1 9.7 9.8 1.3 14.2 12.3 12.3 1.8 1.1 1.3 5, Data used is YTD Bajaj Auto Hero MotoCorp TVS Motors HMSI Others Exhibit 2: Domestic market share movement in three-wheelers In April 218, domestic 3W volumes grew 54.2% YoY. This was mainly supported by market leader Bajaj Auto, which reported strong volume growth of 8% YoY, thereby gaining market share by 83 bps YoY to 57.5%. TVS Motors 3-W volumes increased 145.7% YoY, leading to market share gains of 14bps YoY to 2.8% Others M&M Piaggio Bajaj Auto Mar-18 8. 9.2 8.5 8.7 8.6 1.6 25.9 24. 31.6 57.5 58.1 49.2 1 2 3 4 5 6 7, Data used is YTD Page 2
Exhibit 3: Domestic market share movement in motorcycles Overall motorcycle volumes increased 19.4% YoY in April 218. HMCL continues to be the market leader in the space 7 Mar-18 with share of ~49.4%. TVS & BAL reported strong volume, outperforming overall industry volumes in April 218 6 5 5.7 51.5 49.4 4 3 2 15.7 15.7 16.3 17.8 15.5 17.3 1 6.6 7.3 7.2 Bajaj Auto Hero Motocorp TVS motor Honda Scooter volumes grew 15.2% YoY in April 218. HMSI maintained its leadership position in scooters with market share of ~64% YoY Exhibit 4: Domestic market share movement in scooters/scooters 7 Mar-18 62.8 64.1 6 56.9 5 4 3 2 1 13.1 1.9 1.6 16.4 13.5 12.9 12.8 13.6 12.4 Hero Motocorp TVS Motors Honda Others, Data used is YTD Page 3
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 HMCL continues to dominate the executive motorcycle segment (<=125 cc) in India with a market share of ~57%. 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* 7 6 5 56.8 15.9 2 16 4 12 3 2 1 7.2 2.1 8 4 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 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 though its growth moderated. This marginally impacted its share at ~53%. 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 8 7 6 5 52.8 21.6 23.4 32 28 24 2 4 16 3 12 2 8 1 2.2 4 Bajaj Auto (LHS) Hero Motocorp (RHS) TVS (RHS) HMSI (RHS) *only top three vehicle two-wheeler OEMs Page 4
Oc t-17 Dec -17 53 561 547 554 599 63 55 525 414 563 556 648 622 ('s) ('s) Hero MotoCorp: Sales volumes 75 6 45 3 15 77 8 91 81 8 79 82 73 74 65 69 72 59 Motorcycles Scooters 1 9 8 7 6 5 4 3 2 1 Hero MotoCorp (HERHON) Hero MotoCorp (HMCL), the market leader in the 2-W space, commenced the new financial year with strong volume growth of 16.5% YoY to 694,22 units. Its motorcycle and scooter volume grew 17.3% YoY and 9.9% YoY, respectively Its top selling model Splendor volume grew 17.9% YoY. HF Deluxe & Glamour reported strong volume growth of 2.9% YoY & 14% YoY, respectively. Among its scooter portfolio, volumes of Maestro increased marginally by.4% YoY. However, Pleasure and Duet volumes grew 19.1% YoY and 23.4% YoY, respectively With the forecast of a normal monsoon this year & strong pipeline of new products coming up, HMCL is confident of sustaining its growth momentum in coming months. It is also ramping up its production capacity, from the current 9.2 mn units to 11 mn units per annum, going forward Exhibit 7: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg Motorcycles 622,261 53,325 17.3 648,433-4. 6,677,735 5,834,26 14.5 Scooters 71,761 65,293 9.9 82,64-12.6 99,458 829,786 9.6 Total Sales 694,22 595,618 16.5 73,497-5. 7,587,193 6,664,46 13.9 Export(inc. above) 16,23 9,963 62.9 25,623-36.7 24,474 177,536 15.2 Exports (% of sales) 2.3 1.7 67 bps 3.5-117 bps 2.7 2.7 3 bps Source: Company, Siam Bajaj Auto: Sales volumes ('s) 5 45 4 35 3 25 2 15 1 5 36 37 294 277 46 45 4 43 51 25 265 284 48 59 39 4 57 37 326 62 34 35 45 64 49 64 6 64 66 43 4 39 264 229 289 298 27 35 5 48 46 45 44 42 4 38 36 34 32 3 Bajaj Auto (BAAUTO) Bajaj Auto s (BAL) 2-W volumes grew 18.9% YoY, largely driven by domestic volumes, which were up 24% YoY. For FY18, its domestic motorcycle volumes declined 1.3% YoY (vs. industry growth of 25.1%) resulting in a significant loss of market share (down 23 bps YoY to 15.7%) Pulsar volumes grew 17.1% YoY to 91,855 units (driven by below 2 cc category). Volumes of its entry level segment (75-11 cc), including brands like CT, Platina, Boxer & Discover, grew 4.9% YoY to 191,23 units, led by strong growth in Boxer exports. Volumes of CT grew 13% YoY while Platina grew 2.9% YoY. The new Discover overall volumes were at 15,613 units. Volumes of V12, V15 fell 94.9% YoY to 321 units, 58.4% YoY, respectively, to 4184 units. Overall volumes of Dominar were at 2,97 units Two-Wheelers Three-Wheelers % exports Its overall 3-W volumes grew 82.8% YoY after domestic volumes grew 8% 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 83 bps YoY to 57.5%. The revival in the export market lifted its volumes up 85% YoY Exhibit 8: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg Total 2-wheeler sales 349,617 293,932 18.9 269,939 29.5 3,369,334 3,219,932 4.6 2W exports 148,875 132,2 12.8 11,952 34.2 1,394,757 1,218,541 14.5 2W domestic sales 2,742 161,93 24. 158,987 26.3 1,974,577 2,1,391-1.3 Total 3-wheeler sales 65,551 35,868 82.8 64,49 1.8 637,457 445,258 43.2 3W exports 36,829 19,911 85. 19,796 86. 267,82 192,32 39.5 3w domestic sales 28,722 15,957 8. 44,613-35.6 369,637 253,226 46. Total Sales 415,168 329,8 25.9 334,348 24.2 4,6,791 3,665,19 9.3 Total Domestic Sales 229,464 177,887 29. 23,6 12.7 2,344,214 2,254,617 4. Total Exports 185,74 151,913 22.2 13,748 42. 1,662,577 1,41,573 17.9 Exports as % of sales 44.7 46.1-133 bps 39.1 562 bps 41.5 38.5 31 bps Source: Company, Siam Page 5
TVS Motors: Sales volumes ('s) 4 35 3 25 2 15 1 5 6 81 86 9 92 114 1 118 112 19 112 144 125 93 95 99 113 134 132 72 66 62 83 85 76 122 17 72 69 79 78 84 86 74 94 11 89 8 72 Motorcycles Scooters Mopeds TVS Motors (TVSMOT) TVS volumes (2-W+3-W) for April 218 came in at ~3.5 lakh units, up 23.7% YoY. The 2-W volumes grew 21.7% YoY while 3- W volumes grew 114.5% YoY Motorcycle segment volumes grew 31.8% YoY to 131,74 units. Volumes of Apache & Star City (family) grew 26.8% YoY to 5,614 units & 42.8% YoY to 41,798 units. Volumes of Sport grew 4.7% YoY to 25,853 units. Its scooter volumes grew 9.6% YoY to 89,245 units. This was after overall volumes of Jupiter & Wego declined 2.3% YoY to 57,295 units & 39.8% YoY to 4,893 units. Volumes of Zest grew 9% YoY to 5564 units. Volumes of its newly launched Ntorq were at 12,145 (vs. 11,5 units MoM). Its moped volumes grew 21.4% YoY to 72,469 units Export volumes grew 71.4% YoY to 61,798 units as 2-W & 3-W volumes grew 46% YoY to 51,814 units & 11.8% YoY to 9,984 units, respectively Exhibit 9: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg Motorcycles 131,74 99,89 31.8 134,412-2. 1,355,576 1,75,248 26.1 Scooters 89,245 81,443 9.6 1,972-11.6 1,134,918 87,863 3.3 Mopeds 72,469 59,674 21.4 8,381-9.8 876,932 91,519-3.7 Total 2-W Sales 293,418 241,7 21.7 315,765-7.1 3,367,426 2,856,63 17.9 3-Wheelers 11,377 5,33 114.5 1,894 4.4 98,684 69,254 42.5 Total Sales 34,795 246,31 23.7 326,659-6.7 3,466,11 2,925,884 18.5 Exports(incl. in above) 61,798 36,52 71.4 59,628 3.6 57,46 422,536 34.9 Exports as % of sales 21.1 15. 18.9 16.9 14.8 Domestice sales 242,997 21,258 15.6 267,31-9. 2,896,64 2,53,348 15.7 Source: Company, Siam HMSI: Motorcycles & scooter sales volumes ('s) 675 6 525 45 375 3 225 15 75 369 334 271 344 394 386 293 282 239 319 325 265 424 183 176 145 168 192 183 144 151 124 17 164 152 212 Moto rcyc le s Sco oters Honda Motorcycles & Scooters India (HMSI) For April 218, HMSI s overall volumes grew 17.8% YoY to 681,91 units. Domestic motorcycle & scooter volume grew 15.9% YoY & 14.9% YoY, respectively Domestic motorcycles volumes grew 15.9% YoY. Volumes of CB Shine & Dream grew 3.1% YoY to 14,48 units & 69.1% YoY to 33,635 units, respectively. Volumes of CB Unicorn were at 3,561 units vs. 2,659 units in April 217. Volumes of its newly launched X-Blade were at 11,527 units. Domestic scooter volume grew 14.9% YoY, as volumes of Activa grew 8.7% YoY to 339,878 units. Volumes of new Grazia & Cliq were at 25,949 units & 3,748 units, respectively. Volumes of Dio de-grew 6% YoY to 41,282 units Export volumes increased 7% YoY to 46,77 units, as volumes of scooter & motorcycle grew 1.6% YoY to 27,97 units & 4.2% YoY to 18,98 units, respectively. According to reports, HMSI is investing 8 crore towards new launch & improve efficiency at its production facilities. It expects double digit growth for FY19E Exhibit 1: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg Motorcycles 212,292 183,182 15.9 152,355 39.3 1,953,931 1,544,348 26.5 Scooters 423,532 368,55 14.9 265,25 59.8 3,821,582 3,197,81 19.5 Total Sales 681,91 578,777 17.8 44,49 54.8 6,124,13 5,8,188 22.3 Exports(incl.above) 46,77 27,45 7.4 21,879 11.6 348,59 283,151 23.1 Exports as % of sales 6.8 4.7 28 bps 5. 179 bps 5.7 5.7 4 bps Domestice sales 635,824 551,732 15.2 418,611 51.9 5,775,513 4,725,77 22.2 Source: Company, Siam Page 6
PV segment reports modest growth The overall passenger vehicles segment grew 3.3% YoY to 349,425 units for April 218. Domestic PV volumes grew 7.5% YoY to 298,54 units but exports volumes declined 15.9% YoY to 5,921 units. Within the subsegment, the utility vehicle (UVs) segment grew 1.6% YoY to 92,966 units, driving overall PV volumes. Volumes of the car segment declined marginally by.4% YoY to 237,113 units. Vans volumes increased 19.5% YoY to 19,346 units. MSIL, the market leader, continues to outperform (overall volumes grew 14.4% YoY to 172,986 units) the overall passenger vehicle space. For April 218, the UV1 sub-segment grew 9.2% YoY to 68,343 units, driven by M&M s (Bolero) volumes that grew 27.7% YoY to 7,91 units. Tata Motor s (Nexon) volumes were at 4,718 units (vs. 4,441 in March 218). MSIL s Vitara Brezza s overall volumes remained flat YoY (up 1.7% YoY) to 1,837 units. The facelift of S-Cross lifted its volumes to 4,471 units (vs. 2,777 unit s YoY). On the flip side, volumes of Ford s Eco-sport volumes declined 2.8% YoY to 11,48 units. Volumes of Honda s (WR-V) & Hyundai s (Creta) declined 9.2% YoY to 2,965 units & 5% YoY to 12,873 units, respectively. Volumes in the UV2 space increased 7.9% YoY to 18,16 units. Toyota Innova s volume increased 7.1% YoY to 7,55 units. Honda s BR-V volume grew 7.4% YoY to 815 units. Aggregate volumes of M&M s models in the UV2 category (viz. Scorpio, Bolero Plus, Xylo, XUV5OO) increased by 15.7%YoY to 9,674 units. Commercial vehicle volumes grew 73.8% YoY to 79,167 units, as M&HCV volumes grew 144% YoY to 31,354 units & LCV volume grew 46.2% YoY to 47,813 units. M&HCV volumes looks higher mainly due to the low base of last year (April 217) impacted by transition from BS III to BS IV emission norms. LCV volumes were aided by increase in demand from e- commerce sector and also for container & refrigerator vehicles. The MHCV/LCV volume ratio was at 4:6 in April 218 vs. 28:72 in April 217 vs. the average ratio 41:59 over the past 36 months. Market share movement According to Siam, domestic market shares for passenger vehicles (PV) and commercial vehicles (CV) in April 218 were as follows: Exhibit 11: Domestic market share movement in passenger vehicles MSIL continues to dominate the PV segment with market share of 54% in March 218 Others Honda Cars M&M Tata Motors Hyundai Maruti 12.8 Mar-18 14.6 14.8 3.1 5.2 5.2 7.3 7.6 7. 6.4 6.4 5.1 15.7 16.3 16.1 54.8 5. 51.9 1 2 3 4 5 6, Data used is YTD * passenger vehicles as per Siam include Vans like Gio, Maxximo, Eeco, Ace Page 7
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-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 over the past three months, with volumes up 11.6% YoY in April 218, primarily supported by market leader MSIL, which grew 18% YoY in the same segment 8 7 6 5 4 3 2 1 67.4 71.2 25.9 22.9 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 Hyundai Maruti, Top two PV OEMs considered M&HCV & LCV volumes increased 144.2% YoY & 46.2% YoY, respectively, in April 218. Thus, overall CV volumes grew 73.8% YoY Tata Motors witnessed substantial market share gains over the last year & continues to be the market leader in the overall CV space with market share of ~47% in April 218 vs. 35.6% in April 217 Exhibit 13: Domestic market share movement in commercial vehicles Mar-18 5 47.1 44. 45 4 36.3 35.6 35 3 25.3 26. 25 18.5 2 15.4 16.4 15 12.6 12.2 1.6 1 5 ALL M&M Tata Motors Others Data used is YTD The MHCV/LCV ratio was at 4:6 in April 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 8 7 6.4 56.9 6 5 43.1 39.6 4 3 2 1 M&H CV LCV Page 8
Tata Motors: Domestic sales volume 8 7 6 ('s) 5 4 3 2 1 12.9 1.9 11.3 18. 27.4 29.1 15.1 14.4 17.6 16.6 17.4 14.4 2.3 18.1 2.5 17.3 31.1 34.6 4.6 36.6 4. 46.5 44.3 45.7 55.6 39.2 CV Sa les PV Sales Jaguar Land Rover sales volume 1 8 (% share of total volumes) 8 6 4 2 41.9 47.1 49.4 51.4 44.4 57.4 49.8 54.2 55.1 49.6 56.9 76.2 45.3 Apr'17 May'17 June'17 July'17 Aug'17 Sept'17 Oct'17 Nov'17 Dec'17 Jan'18 Feb'18 Mar'18 Apr'18 7 6 5 ('s) 2 1 % Jaguar % LR JLR total volumes(rhs) 4 3 Tata Motors (TATMOT) Tata Motors overall standalone volumes increased 82.5% YoY to 56,521 units, backed by its domestic CV & PV segment, which grew 126.5% YoY & 34.4% YoY, respectively Domestic M&HCV volumes grew 256.1% YoY to 16,57 units while LCV volumes grew 73.4% YoY to 19,76 units. Apart from demand drivers like 1) overloading restrictions; 2) pick-up in infrastructure projects, 3) higher demand from e-commerce, refrigerator & container vehicles, we believe the low base of last year (impacted due to transition from BS III to BS IV) has led to the spurt in growth. On PV side, volumes of Tiago & Tigor were at 7,52 units & 2,67 units, respectively. Within its UV portfolio, volumes of Hexa (launched in January 217) & Nexon (launched in September 217) were at 818 units & 4,717 units, respectively, in April 218 JLR s wholesale volumes grew 8% YoY at 45,284 units. Jaguar volumes grew 18% YoY to 14,874 units. Land Rover volumes grew 3.7% YoY to 3,41 units. We believe except North America and Europe. Rest all markets would have supported the growth Exhibit 15: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg Domestic MHCV 16,57 4,653 256.1 21,256-22. 168,13 148,91 12.8 Domestic LCV 19,76 11,364 73.4 27,918-29.4 231,322 174,281 32.7 Domestic Pass.Car Sa 1,657 11,22-5. 12,513-14.8 135,43 136,184 -.6 Domestic UV 6,578 1,67 39.3 7,753-15.2 51,891 18,758 176.6 Exports 3,1 2,128 41.4 6,713-55.2 52,42 64,199-18.4 Total Sales 56,521 3,972 82.5 76,153-25.8 639,58 542,323 17.8 Jaguar 14,874 12,68 18. 21,48-29.3 176,246 178,676-1.4 Landrover 3,41 29,315 3.7 55,173-44.9 457,264 421,934 8.4 Total JLR Sales 45,284 41,923 8. 76,221-4.6 633,51 6,61 5.5 Source: Company, Siam Maruti Suzuki India (MARUTI) Maruti Suzuki India: Sales volumes ('s) 18 16 14 12 1 8 6 4 2 151 4.4 137 16 165 164 163 146 155 13 151 15 161 173 Total Sa les Ex port % 14 12 1 8 6 4.6 4 2 Maruti Suzuki s (MSIL) volumes grew 14.4% YoY to 172,986 units Volumes of its domestic mini car segment fell 2.8% YoY, as volumes of Alto declined 5.8% YoY 21,233 units. Domestic volumes of Baleno & Vitara Brezza were at 2,412 & 1,818 units, respectively. DZire s (domestic) volumes were at 21,41 units. New Swift clocked volumes of 22,776 units. Export volumes grew 19.1% YoY to 8,8 units It has commissioned a study to gauge the customer s requirement as it plans to bring on road affordable electric vehicle by 22 Exhibit 16: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg Omni, Eeco,Versa 15,886 13,938 14. 13,689 16. 155,137 152,9 2.1 Alto, Wagon-R, Zen, Swift,Ritz, Celerio, Dzire,Baleno 121,628 12,481 18.7 16,396 14.3 1,175,658 998,831 17.7 SX4, Swift Dzire Tour, Ciaz 5,116 7,24-27.2 4,321 18.4 58,913 97,6-39.3 Total Passengers 142,63 123,443 15.5 124,46 14.6 1,389,78 1,247,9 11.4 Gypsy, Vitara,Ertiga,Brezza 2,84 2,638.8 22,764-8.6 253,759 195,741 29.6 Total Domestic 163,434 144,81 13.4 147,17 11.1 1,643,467 1,443,641 13.8 LCV (Super Carry) 1,544 411 NA 1,412 NA 1,33 9 NA Exports 8,8 6,723 19.1 12,16-33.4 126,74 124,62 1.6 Total Sales 172,986 151,215 14.4 16,598 7.7 1,779,574 1,568,63 13.4 Exports as % of sales 4.6 4.4 7.5 7.1 7.9 Source: Company, Siam. Page 9
Ashok Leyland (ASHLEY) Ashok Leyland s (ALL) volumes grew 78.8% YoY to 12,677 units, as M&HCV volumes grew 97.9% YoY to 8,968 units. Its LCV segment grew 45% YoY to 3,79 units. On an FY18 basis, its M&HCV market share has improved 43 bps YoY to 34.2% YoY Volumes of M&HCV passenger increased 13.1% YoY to 1,455 units while M&HCV goods volumes grew 131.5% YoY to 7,513 units. Exports grew 6.5% YoY, with overall share at 5.7% of sales According to the management, ALL is planning promising product launches across categories (M&HCV & LCV segments). Growth in M&HCV is likely to sustain for the next two years on the back of infrastructure growth & pre-buying ahead of BS VI emission norms, and is also focusing on defence and aftermarket segments Exhibit 17: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg M&HCV Passenger 1,455 1,286 13.1 2,279-36.2 2,22 22,592-1.5 M&HCV Goods 7,513 3,246 131.5 14,778-49.2 111,212 9,69 22.6 LCV 3,79 2,558 45. 5,396-31.3 43,419 31,774 36.6 Passenger Vehicles - NA NA - - NA Total Sales 12,677 7,9 78.8 22,453-43.5 174,851 145,56 2.5 Exports 726 682 6.5 92-21.1 16,239 11,792 37.7 Exports as % of sales 5.7 9.6 4.1 9.3 8.1 Source: Company, Siam Mahindra and Mahindra: Sales volume 18.8 May-17 Jul-17 Sep-17 Nov-17 16.5 18.3 26. 25.6 22.8 21.9 2.5 28.3 32.9 3.9 4.3 ('s) Jan-18 Mar-18 ('s) 45.6 Ashok Leyland: Total sales 25 2 15 ('s) 1 5 2.6 2.9 4.5 6.1 3.1 3. 3. 3.6 3.8 3.8 3.3 4.46 4.46 9.2 9. 1.6 11.8 9.1 1.6 15.9 13.6 13.7 May-17 Jul-17 Sep-17 Nov-17 Jan-18 M&HCV LCV 5.4 17.1 Mar-18 3.71 9. 7 6 5 4 3 2 1 39.4 41.9 May-17 35.7 41.7 Jul-17 42.1 53.7 Sep-17 51.1 38.6 Nov-17 Mahindra and Mahindra: Tractor sales 5 45 4 35 3 25 2 15 1 5 39.2 De c-17 52. Ja n-18 51.1 62.1 Mar-18 48.1 Mahindra and Mahindra (MAHMAH) M&M s overall automotive volumes grew 22.2% YoY to 48,97 units. Its core domestic UV volumes grew 1.9% YoY to 2,371 units. Overall volumes of Bolero (family) grew 33.9% YoY to 8,552 units. Volumes of XUV5 grew 54.7% YoY to 3,27 units. Volumes of TUV3OO grew 1.4% YoY to 2,115 units while KUV1OO volumes declined 6.6% YoY to 2,55 units. With M&M reporting muted UV growth of 5% YoY vs. 29.6% YoY growth reported by MSIL, its market share contracted 383 bps YoY to 25.4% in FY18, thereby losing its numero uno position in the UV space M&M s tractor volumes grew 18.9% YoY to 3,925 units. Domestic tractor industry volumes grew 18.9% YoY to 65,283 units in April 218 & 22.1% YoY to 711,478 units FY18 Exhibit 18: Volume performance (in units) Segment %chg Mar-18 %chg FY'18 FY17 %chg UV s 2,371 18,363 1.9 24,593-17.2 233,915 222,541 5.1 4-Wheeler pickups 17,495 14,36 21.8 23,53-24.1 199,574 171,75 16.2 M & HCV 1,468 76 17.9 2,443-39.9 17,224 15,227 13.1 Total 4wheeler Sales 4,89 34,391 18.9 52,51-21.4 465,813 418,73 11.4 3-Wheeler 4,327 3,438 25.9 6,62-34.5 54,625 52,36 4.4 Total Domestic Auto Sales 45,217 37,829 19.5 58,653-22.9 52,438 47,379 1.6 Exports 2,88 1,528 88.5 3,424-15.9 28,227 37,251-24.2 Total Auto Sales 48,97 39,357 22.2 62,77-22.5 548,665 57,63 8.1 Exports as % of sales 6. 3.9 5.5 5.1 7.3 Tractors - Domestic 29,884 25,81 19.1 26,958 1.9 31,934 248,49 21.5 - Exports 1,41 92 13.2 1,319-21.1 15,449 14,583 5.9 Total Tractors 3,925 26,1 18.9 28,277 9.4 317,383 262,992 2.7 Exports as % of sales 3.4 3.5 4.7 4.9 5.5 Source: Company, Siam Page 1
Top domestic model wise volumes for April 218 Exhibit 19: Top 1 passenger vehicle Models sold in India (in units) S.No. Models Models 1 Swift 23,82 Swift 22,776 2 Alto 22,549 DZIRE 21,41 3 Baleno 17,53 Alto 21,233 4 Wagon R 16,348 Baleno 2,412 5 Elite i2 12,668 Wagon R 16,561 6 Grand i1 12,1 Elite i2 12,369 7 VITARA BREZZA 1,653 Grand i1 12,174 8 Creta 9,213 VITARA BREZZA 1,818 9 TOUR S 8,66 Celerio 9,631 1 Celerio 8,425 Creta 9,39 Exhibit 2: Top 1 two-wheelers Models sold in India (in units) S.No. Models Models 1 Activa 312,632 Activa 339,878 2 Splendor 226,681 Splendor 266,67 3 HF Deluxe 143,794 HF Deluxe 172,34 4 CB Shine 1,824 CB Shine 14,48 5 Passion 8,53 Passion 95,834 6 Glamour 62,713 Glamour 69,9 7 Jupiter 58,527 Pulsar 67,712 8 TVS XL Super 57,938 TVS XL Super 67,78 9 Pulsar 5,219 CT 59,944 1 CT 45,3 Jupiter 56,599 Page 11
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 New Ertiga Jun-18 2 Maruti Suzuki Jimmy Dec-19 3 Hyundai i2 Sport Jun-18 4 Hyundai Kona Nov-18 5 Mahindra & Mahindra New XUV5OO Aug-18 6 Honda Cars Amaze Jun-18 7 Honda Cars Honda CR-V Mar-19 8 Hero Motocorp Xpluse Jun-18 9 Hero Motocorp Duet-E Nov-18 1 Hero Motocorp Duet 125 Nov-18 11 Hero Motocorp Maestro Edge 125 Dec-18 12 Eicher Motors Continental GT 65 Jun-18, Auto NDTV Page 12
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% Telangana 4% Rajasthan 5% Haryana 5% Maharasht ra 11% Delhi 6% Tamil Nadu 7% U.P. 8% Kerala 8% Karnataka 7% Gujarat 9% 35 3 25 2 15 1 5 28598 298564-6. 26168 17363 Maharashtra U.P. 18.8 13.1 12.6 9.7 Gujarat 213525 188788 Kerala 192353 175299 9MFY18 (units) 9MFY17 (units) YoY growth % 166716 178216-6.5 162866 1593 Karnataka Tamil Nadu 2.4 3.1 4.2 Delhi 148487 14492 Haryana 125119 1225 Rajasthan 11995 15788 Telangana 9144 9746 25 2 15 1 5.8-5 -1 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% 25 2 15 1 5 U.P. 251951 16685 28.2 23.7 21.7 147758 1427179 3.1 119888 121642-1.5 876549 877697 -.1 13863 911788 13.8 8.7 99223 9574 1. 697751 564264 Maharashtra Tamil Nadu Andhra Pradesh Gujarat Karnataka Bihar Madh. Prad. 846472 69578 Rajasthan 88876 816671 West Bengal 766824 689959 3 25 2 15 11.11 5-5 Page 13
Gujarat Maharashtra Karnataka Andhra Pradesh Telangana U.P. Kerala Bihar Tamil Nadu Madh. Prad. 39967 4166 29623 3698 3382 44641 26565 26654 27633 29135 23366 2257 26852 28745 2827 2162 1667 13132 52386 99745 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) 9MFY18 (units) 9MFY17 (units) YoY growth % 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% 9 8 7 6 5 4 3 2 1 7765 68986 11.7 53994 432 33.9 31. 16.4 13.7 13.3 41444 4159.9 38834 34156 Maharashtra U.P. Tamil Nadu Rajasthan 37415 Karnataka 32157 3421 33636 1.1 34157 34957-2.3 32353 247 Andhra Pradesh Gujarat Haryana 3121 West Bengal 27532 2948 Assam 16667 4 35 3 25.725 2 15 1 5-5 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 % 12 1 9.4 1 8 8 6 4 6 22.32 4 5.9-4.1-3.5 -.3-5.2-6.6-3.7 2-25.9-2 -4 Page 14
RATING RATIONALE ICICI Direct Research endeavours to provide objective opinions and recommendations. ICICI Direct Research 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 ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 4 93 research@icicidirect.com Page 15
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