X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Two wheelers: Good show - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 23, 2001

    Two wheelers: Good show

    Auto stocks off late, are attracting significant buying interest on the bourses thanks to a better than expected performance for the second quarter ended September 30, 2001. Here we have consolidated 2QFY02 performance of three two wheeler majors viz. Bajaj Auto, Hero Honda and TVS Motor Company (erstwhile TVS Suzuki) to get a perspective on the sectoral performance.

    (Rs m) 2QFY01 2QFY02 Change
    Sales 20,387 23,966 17.6%
    Other Income 821 1,251 52.4%
    Expenditure 18,484 20,879 13.0%
    Operating Profit (EBDIT) 1,903 3,086 62.2%
    Operating Profit Margin (%) 9.3% 12.9%  
    Interest 75 44 -41.2%
    Depreciation 638 694 8.7%
    Profit before Tax 2,010 3,599 79.1%
    Extraordinary item 96 494 416.3%
    Tax 708 1,503 112.4%
    Profit after Tax/(Loss) 816 1,523 86.6%
    Net profit margin (%) 4.0% 6.4%  
    No. of Shares (eoy) (m) 342.2 324.0  
    Earnings per share (Rs)* 9.5 18.8  
    (*annualised)      

    Following the success story of Hero Honda on the motorcycle front, the current year saw the introduction of new models from Yamaha, Kinetic Engineering and LML (apart from the big three). And it seems to have yielded positive results for all the auto majors. While Hero Honda has posted a 32.8% growth in motorcycle volumes, Bajaj Auto and TVS have registered a 14.2% and 1.1% increase in sales respectively for the first half of the current financial year. Yamaha, Kinetic and LML also witnessed notable rise in volumes in the current year.

    Motorcycle stats - (Apr-September 2001)
    (% change) Production Sales
    Hero Honda 29.8% 32.8%
    Bajaj Auto 15.3% 14.2%
    TVS 6.0% 1.1%

    The gradual shift in buying pattern has clearly enthused players to introduce atleast two new models per quarter to keep volume growth ticking. However, TVS was the only player to report a drop in sales (8.8%) in 2QFY02. But this could be due to the fact that the other segments of the two wheeler industry namely, mopeds and scooters are witnessing a consistent fall in volumes over the last three years. Since TVS has a significant presence in both these segments, topline growth has been affected.

    Scooter and moped sales for 1HFY02 have declined by 2.7% and 33.5% respectively with TVS, Kinetic, LML and Bajaj Auto being the hardest hit. Honda Motorcycle, the latest to enter the scooter segment, has gained a market share of 3.3% in 1HFY02.

    Cumulative net profit for 2QFY02 has increased by 86.6% on the back of a sharp rise in operating margins primarily led by Bajaj Auto, which saw its margins going up from 6.7% in 2QFY01 to 14.4% in 2QFY02 at the operating level. But higher tax provisioning on account of deferred taxation lowered profit growth in 2QFY02.

    Second half of the current year will not be any different from 1HFY02 except for a higher growth in motorcycle volumes thanks to a good agricultural output in the current year. Moped and scooter segments would continue to suffer in 2HFY02 as well, thus affecting profitability of select players like TVS, Bajaj Auto and Kinetic Engineering.

     

     

    Equitymaster requests your view! Post a comment on "Two wheelers: Good show". Click here!

      
     

    More Views on News

    Tata Motors Ltd: Another Disappointing Quarter, Management fails to Perform! (Quarterly Results Update - Detailed)

    Aug 14, 2017

    Tata Motors Ltd disappoints again for both India and JLR business. Management commentary indicates a slow year ahead.

    Maruti Suzuki Ltd: Bumpy First Quarter. GST dents Margins! (Quarterly Results Update - Detailed)

    Aug 2, 2017

    GST realted cost impacts Margins, Management expects good year ahead.

    Hero Motocorp Ltd: Riding on the Scooters Growth, Maintains Margins! (Quarterly Results Update - Detailed)

    Aug 1, 2017

    Good Recovery in the Scooters market, expects pick up in exports too.

    Bajaj Auto Limited: Recovery in Exports but Domestic Disappoints! (Quarterly Results Update - Detailed)

    Aug 1, 2017

    New Export Markets picking up, Management expects good recovery in domestic Three wheeler market.

    Bajaj Auto Limited: Finishes the Year with Headwinds. Poised for a Recovery Ahead? (Quarterly Results Update - Detailed)

    Jul 6, 2017

    Ends the year on a Flat note. Expects good recovery in the exports market.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE AUTO


    Aug 18, 2017 (Close)

    COMPARE COMPANY

    MARKET STATS