Automobiles Q2 Preview- Two-Wheelers To Outshine In The Medium Term; PV, CV Trends Moderating: Axis Securities

Axis Securities Report

We expect revenue/Ebitda/PAT for our OEM coverage universe to grow by ~5.5%/8.9%/10.6% YoY along with ~47 bps improvement in Ebitda margin. The growth will be driven by-

1. Doubledigit volume growth in two-wheelers,

2. low to mid-single digit growth for passenger vehicles/tractors partially offset,

3. YoY Decline in the commercial vehlcle volumes respectively.

The YoY Ebitda margin expansion will be led by richer product mix, raw material softening and price hikes taken over the last one year.

For auto ancillaries under our coverage, we estimate revenue/Ebitda/PAT in Q2 FY25 to grow ~7%/8.5%/10.5% approximately on a YoY basis for Auto Ancillaries under our coverage on account of sale volume growth (except commercial vehicle segment), richer product mix and operating leverage.

We expect revenue/Ebitda to grow by 4.2%/4.5% QoQ due to seasonality (inventory build up by OEMs for the festive season) and operating leverage for some auto ancillaries.

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