Automotive Axles Q3 Results Review - Overall Miss; Outlook Likely To Be Muted: Axis Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.Automotive Axles Ltd. posted weaker than expected revenue/Ebitda/ profit after tax than our estimates. Revenue at ~Rs 541 crore, down17%/7% YoY/QoQ, (6% Miss) versus medium and heavy commercial vehicle industry production volume which grew by 9%/3% YoY/QoQ (as per SIAM December- 24 data). Ebitda at Rs 58 crore was down 26%/12% YoY/QoQ (10% Miss) on account of higher personnel costs and other expenses as a percentage to sales, partly offset by higher gross margins. Ebitda margins stood at 10.7% versus 11.3% in Q2 FY23 (11.9% in Q3 FY24, our estimate was 11.2%). PAT stood at Rs 39 crore, down 23%/13% YoY/QoQ(8% Miss), largely following the Ebitda; partly offset by higher non operating income..Outlook: The CV industry has witnessed tonnage growth over the last two years (in terms of FY19) inspite of production volumes still being lower than peaks of FY19. Going forward the growth rate is likely to moderate in FY24/25E owing to the high base of FY23. Furthermore, with exports growth dependent on its parent Meritor Global, we see limited margin expansion potential. With commodity prices expected to remain at similar levels in near future, we forecast an Ebitda/PAT compound annual growth rate of 1%/2% over FY23-26E..Valuation and Recommendation: Entering into an election year and having a cautious outlook on the CV industry we value the stock at 16 times FY26 earning per share (earlier 17 times December- 25 EPS) to arrive at our target price of Rs 1,800/share, which implies a downside of 10% from the current market price. As a result, we downgrade the stock from 'Hold' to 'Sell' (previously 'Buy' to 'Hold' in Q2 FY24 report)..Click on the attachment to read the full report:.Data Patterns Q3 Results Review - Order Delays Mask Strong Execution; Maintain Neutral: Yes Securities.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Automotive Axles Q3 Results Review - Overall Miss; Outlook Likely To Be Muted: Axis Securities

Medium and heavy commercial vehicle production volume up 9% YoY in nine months FY24.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP

Automotive Axles Q3 Results Review - Overall Miss; Outlook Likely To Be Muted: Axis Securities

Medium and heavy commercial vehicle production volume up 9% YoY in nine months FY24.

Choose a plan

Follow Us

DOWNLOAD THE APP