Automotives Q1 Preview - Two-Wheelers Set To Be The Winners; Seasonality To Impact Rest: ICICI Securities

ICICI Securities Report

We expect Q1 FY25 YoY revenue/Ebitda growth of ~15%/~25% (ex-Tata Motors Ltd.) with two-wheelers set to deliver sequentially better results versus four-wheelers in general (barring Mahindra and Mahindra Ltd.).

A combination of improved scale, rising average selling price through better mix and favourable input commodity prices shall drive ~25% YoY Ebitda growth for the auto basket. For Maruti Suzuki India Ltd., we believe key aspects to watch out for would be a reversal in CNG vehicle mix, post supply-chain disruption in Q4, resulting in potential ASP and margin surprise.

Domestic tyre businesses should see ~100–150 bps of gross margin decline QoQ on the back of limited price hikes to combat EPR-led cost inflation and a surge in natural rubber cost. In the diversified ancillaries (ancls.) space, we expect majority to report flat to weaker results QoQ, barring Samvardhana AMIL.

Top picks: M&M, Maruti Suzuki and TVS Motor in original equipment manufacturers; CIE India, ASK Auto in ancillaries .

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