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How to solve the auto puzzle?

Dec 23, 2010

In this article, Equitymaster attempts to help investors to understand the automobile sales trend from a long term perspective

The greatest rivalry in the Indian auto space?

Jun 25, 2010

In this article, Equitymaster discusses the one of the greatest rivalries in the Indian auto space - Bajaj auto versus Hero Honda.

Hero Honda: The dividend Maharaja

Mar 5, 2009

Hero Honda dividend record, Hero Honda dividend growth, hero honda EPS

Auto: What happened in March?

Apr 12, 2007

What started off with a gallop has sadly ended with a whimper. We are referring to the auto numbers for the key segments in the month of March. As evident from the table below, most of the major companies across key segments have grown their volumes at a lower rate than what was achieved in the entire fiscal. Let us have a look at the performance of each company and the likely reasons behind the same.

Autos: The month that was...

Feb 8, 2007

If January sales are any indication, auto companies, practically across all the segments have started calendar year 2007 in top gear. With macroeconomic fundamentals remaining strong, companies yet again notched up impressive volume growth. Let us have a look at the performance of all the segments and major companies within those segments during the month of January 2007.

Auto: Not just about volumes

May 2, 2006

With the fourth quarter result season beginning on a good note for automobile companies (Maruti), there has been a renewed interest in stocks from the sector. While the effect of good set of volume numbers is likely to be filtered into the fourth quarter numbers, it should be noted that the automobile players should not be judged only by their volume performance. A long-term investor should consider a number of other factors before making an investment in automobile companies. In this article, w

Auto: On a sound footing, but...

Apr 13, 2006

Domestic auto companies have reported robust growth in volumes sales in the past few months. The effect is likely to be filtered into the fourth quarter numbers that are slated to be announced soon. However, at the outset, we would like to inform investors that automobile sales are seasonal in nature. With this reasoning, here are the key things that investors should keep in mind. For the purpose of this article, we have considered the financial numbers of seven companies that form a part of th

Auto: Why to invest in the sector?

Apr 4, 2006

During the last year, automobile stocks have been key participants in the bull run. In fact, the automobile universe of QIS has outperformed the broader indices. Given the broader outperformance, an investor should have compelling reasons to invest in automobile stocks. In this article, we shall look at the macro factors that justify an investment in the automobile industry from a long-term perspective. By long term, we mean a time horizon of at least three years.

Auto: It's not just about volumes...

Jan 10, 2006

With the results season having already kicked in, soon to be followed by the results from auto majors, let us look at a few important points to be kept in mind while analysing the results of auto companies. At the outset, we would like to inform investors that automobile sales are seasonal in nature. With this pretext, here are the key things that an investor should keep in mind. For the purpose of this article, we have considered the financial numbers of the companies in Quantum Universe (7 com

TVS Motors: Where do you go?

Apr 18, 2005

TVS Motors is the third largest company in the two-wheeler industry with a market share of 16%. Infact, it is the only Indian company without a foreign collaboration in the two-wheeler industry. When the company opted out of the collaboration with Suzuki in 2002, many believed that TVS was headed towards extinction. But the company proved the doomsayers wrong and came out with a very successful 'TVS Victor'. However, since then growth has slowed. We take a look whether the company will weather t

Hero Honda: A SWOT analysis

Apr 11, 2005

Today if one talks about Indian two-wheeler industry, reference to Hero Honda Motors Limited is by default. It is not only the market leader in the two wheeler segment in India but also is the number one two wheeler company in the world by volumes. The company's name is synonymous with fuel-efficient bikes and longevity. The company has a presence in all bike segments viz. economy (CD 100SS, CD Dawn) executive (Super Splendor, Splendor+) and premium (Karizma, CBZ). Splendor is the most successfu

Two-wheelers: 2QFY05 in retrospect

Nov 10, 2004

2QFY05 turned out to be yet another good quarter for the two-wheeler industry. Riding on the back of a low interest rate regime and robust economic growth, industry volumes registered a strong growth of 13% during the quarter. While financials of the big three of the two-wheeler industry i.e. Hero Honda, Bajaj Auto and TVS Motors are already out and have also been subjected to close scrutiny, let us see how the consolidated figures of these companies.

TVS Motor: The slide continues

Oct 25, 2004

TVS Motor, India’s third largest two-wheeler manufacturer has continued to experience topline pressure and has reported a small 3% YoY drop in topline during 2QFY05. The fall in bottomline however is slightly higher at 8%. The corresponding figures for 1HFY05 stood at 5% and 11% respectively.

Bajaj Auto: Margins hit a roadblock…

Oct 20, 2004

Bajaj Auto, India’s second largest two-wheeler manufacturer has witnessed pressure at the operating level during 2QFY05. As a consequence, despite a robust 15% YoY growth in topline during the quarter, the bottomline has witnessed an 11% fall. Decline in other income and higher tax provisioning have also contributed to the drop in net profits.

Hero Honda: The key is profitability

Oct 14, 2004

Hero Honda, India’s largest two-wheeler manufacturer, has reported robust 2QFY05 results. While the topline has grown at a rate of 39% YoY, the growth in bottomline has been somewhat lower at 24%. Pressure at the operating level and higher tax incidence has led to a lower rate of growth in bottomline. For the first half ended September 2004, the topline and the bottomline growth stood at 35% and 22% respectively.

Two-wheelers: 1HFY05, a rear mirror gaze…

Oct 6, 2004

1HFY05 seems to have turned out to be another good period for the two-wheeler industry with most of the company carving out good numbers on the back of robust economic growth and continuity of low interest regime. Against this backdrop, let’s have a look at the sales performance of the three leading two-wheeler companies and try and analyse what would be the shape of things to come.

Auto: Two-wheelers or four-wheelers?

Sep 29, 2004

With per capita income in the country growing at a fair clip, growth prospects of the Indian auto industry appear to be quite encouraging. Therefore its an opportune time for an investor to stay invested in an auto company for the longer term and benefit by way of attractive returns. But what would be bewildering from his point of view would be the fact that if given a choice, where would he like to put his money: A two-wheeler stock or a four-wheeler stock?

Motorcycles: An oversold story?

Sep 15, 2004

Despite an impressive annual growth rate (compounded) of 14% in the last three years, the prospects of the two-wheeler industry look attractive from a medium to long-term perspective. With a significantly lower penetration as compared to other developing nations and favorable demographics, a growth rate of 12%-14% over a longer-term period cannot be ruled out.

Hero Honda: How dark are the clouds?

Aug 25, 2004

If the recent trend is any indication, Hero Honda, the largest two-wheeler maker in the country, seems to be under some pressure. From highs witnessed during early July, the stock has lost around 18% to date, a significant fall for a leading two-wheeler company. Let us try to see whether the fall is really justified or is just a temporary aberration.

TVS Motors: Will the outperformance continue?

Aug 11, 2004

The last one-month or so has seen significant buying interest in TVS Motors, India’s third largest two-wheeler company. Witnessing a strong 20% gain in market capitalisation, the company has managed to get past its more fancied rivals like Bajaj Auto and Hero Honda, companies that suffered a decline of 2% and 6% each. These events makes one wonder whether the current interest in TVS is really justified?


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