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Economic Times
5 hours ago
- Automotive
- Economic Times
Auto ancillary stocks shift into top gear but caution lights flash
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Auto ancillary companies have generated higher investor interest over the past month amid buoyancy in the broader market. However, investors need to be cautious since the sector may face pressure due to muted demand for commercial and passenger vehicle (CV and PV) demand. Of the 22% increase posted by the ET-Auto Ancillaries index in the past three months, 13% was in one month, reflecting improved traction in these a sample of 22 auto component companies , half have posted year-on-year revenue growth in the March quarter in double-digits. However, only eight of them have recorded double-digit growth in net profit. While seven companies posted double-digit growth in operating profit before depreciation and amortization (EBITDA), operating margin expanded for eight two-wheeler companies reported a slower volume growth in the second half of FY25 after a strong growth in the first six months according to Motilal Oswal Financial Services (MOFSL). Tractors was the only segment that witnessed a strong demand automobiles sector saw earnings downgrades for FY26 as margin may take a hit amid rising input costs and tepid growth visibility. 'The recent appreciation of the rupee against the dollar is a key monitorable for exports-focused companies. Given these factors, FY26 is expected to be a year of modest earnings growth for most companies under our coverage,' said margin outlook for global original equipment manufacturers (OEM) adds to the uncertainty. According to Elara Capital, top international auto makers including Mercedes-Benz, Porsche and Ford have either downgraded or suspended guidance for 2025, citing tariff risks, market share loss in China, and margin headwinds. This may impact Indian auto parts suppliers with global linkages like Bharat Forge Sona BLW , and Motherson Sumi A possible turnaround in the entry level demand for bikes driven by the rural market after a lacklustre trend in the recent quarters, new product launches and the vehicle scrappage policy hold the key for a demand uptick in the near term, according to YES Securities. It expects gross margins to be under marginal pressure due to a possible material inflation, cushioned partially by favourable product mix in the first half of FY26. In addition, the income tax relief is anticipated to boost demand, especially for price-sensitive fundamentals showing signs of fatigue, analysts advise caution in near term. Stocks with strong domestic demand drivers, rural exposure, and EV-related product lines may hold up better, but margin pressures and global uncertainties could limit further upside. According to MOFSL, the recent stock market rally has led to the normalisation of valuation multiples which had fallen in the recent past. 'The earnings outlook for the sector appears benign, given the modest volume growth outlook and expectations of rising input cost pressure,' the brokerage stated in the report, highlighting that it prefers Endurance Technologies and Happy Forgings among auto ancillaries stocks.
Time of India
5 hours ago
- Automotive
- Time of India
Auto ancillary stocks shift into top gear but caution lights flash
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Auto ancillary companies have generated higher investor interest over the past month amid buoyancy in the broader market. However, investors need to be cautious since the sector may face pressure due to muted demand for commercial and passenger vehicle (CV and PV) demand. Of the 22% increase posted by the ET-Auto Ancillaries index in the past three months, 13% was in one month, reflecting improved traction in these a sample of 22 auto component companies , half have posted year-on-year revenue growth in the March quarter in double-digits. However, only eight of them have recorded double-digit growth in net profit. While seven companies posted double-digit growth in operating profit before depreciation and amortization (EBITDA), operating margin expanded for eight two-wheeler companies reported a slower volume growth in the second half of FY25 after a strong growth in the first six months according to Motilal Oswal Financial Services (MOFSL). Tractors was the only segment that witnessed a strong demand automobiles sector saw earnings downgrades for FY26 as margin may take a hit amid rising input costs and tepid growth visibility. 'The recent appreciation of the rupee against the dollar is a key monitorable for exports-focused companies. Given these factors, FY26 is expected to be a year of modest earnings growth for most companies under our coverage,' said margin outlook for global original equipment manufacturers (OEM) adds to the uncertainty. According to Elara Capital, top international auto makers including Mercedes-Benz, Porsche and Ford have either downgraded or suspended guidance for 2025, citing tariff risks, market share loss in China, and margin headwinds. This may impact Indian auto parts suppliers with global linkages like Bharat Forge Sona BLW , and Motherson Sumi A possible turnaround in the entry level demand for bikes driven by the rural market after a lacklustre trend in the recent quarters, new product launches and the vehicle scrappage policy hold the key for a demand uptick in the near term, according to YES Securities. It expects gross margins to be under marginal pressure due to a possible material inflation, cushioned partially by favourable product mix in the first half of FY26. In addition, the income tax relief is anticipated to boost demand, especially for price-sensitive fundamentals showing signs of fatigue, analysts advise caution in near term. Stocks with strong domestic demand drivers, rural exposure, and EV-related product lines may hold up better, but margin pressures and global uncertainties could limit further upside. According to MOFSL, the recent stock market rally has led to the normalisation of valuation multiples which had fallen in the recent past. 'The earnings outlook for the sector appears benign, given the modest volume growth outlook and expectations of rising input cost pressure,' the brokerage stated in the report, highlighting that it prefers Endurance Technologies and Happy Forgings among auto ancillaries stocks.
Economic Times
3 days ago
- Business
- Economic Times
Nifty's PAT grew 3% in Q4FY25, beat Motilal Oswal's estimates; Bharti Airtel, HDFC Bank among top 5 contributors
Nifty posted 3% net profit growth in Q4FY25, marking its fourth straight single-digit gain. Bharti Airtel, ICICI Bank, and others drove 137% of incremental earnings, while MOFSL stays bullish on large-caps and domestic sectors. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Q4FY25 earnings based on Mcap Tired of too many ads? Remove Ads Nifty delivered a fourth successive quarter of single-digit net profit growth since the pandemic of 2020 at 3%, with heavyweights Bharti Airtel Tata Motors and HDFC Bank contributing 137% of the incremental year-on-year accretion in earnings according to estimates by Motilal Oswal which remains biased towards large-caps and domestic plays amid a volatile backdrop."Our model portfolio stance remains unchanged, with a distinct bias towards large-caps and domestic plays, given the current volatile backdrop. We are OW (overweight) on BFSI, consumer discretionary, industrials, healthcare, IT and telecom while we are underweight on Oil & Gas, cement, automobiles, real estate and metals," MOFSL uptick in Profit After Tax (PAT) was higher than MOFSL's estimates of 2% and IndusInd Bank State Bank of India (SBI), Kotak Mahindra Bank , and Grasim Industries contributed adversely to the broad-based analysis reveals 13 sectors exceeding expectations in the 4QFY25 corporate earnings, showcasing widespread outperformance across and OMCs propelled earnings growth and were followed by PSU banks, automobiles, healthcare, technology, and capital goods, fuelling this healthy performance. Conversely, Oil & Gas (excluding OMCs) and private banks dragged overall aggregate earnings of the MOFSL universe companies grew 10% YoY versus the estimates of 2% YoY in metals profit surged 45% YoY on a low 4QFY24 base while for OMC's PAT jumped 14% YoY versus estimates of a 59% decline. Earnings of PSU banks (+9% YoY), automobiles (+8% YoY), technology (+7% YoY), healthcare (+17% YoY), capital goods (+14% YoY) and consumer durables (+37% YoY) stood at 9%, 8%, 7%, 17% and 37%, respectively. As for the telecom sector, profit of Rs 500 crore was reported versus loss of Rs 2,500 contrast, aggregate earnings growth was hit by Oil & Gas (ex OMCs), which posted a profit decline of 12% YoY. Further, earnings were dragged down by private banks (-6% YoY), cement (-3% YoY) and consumers (-1%).The MOFSL review reveals that largecaps and midcaps delivered a beat while smallcaps reported a coverage universe comprising 86 largecap companies posted an earnings growth of 10% YoY while midcaps (89 companies) delivered 19% earnings growth versus estimates of 10%. The earnings were led by financials (PSU banks and NBFCs), metals, healthcare and contrast, smallcaps (122 companies) experienced a broad-based miss adversely impacted by the financials sector. The smallcap earnings dipped 16% YoY versus estimates of 11% fall. In this, 39% of the coverage universe missed MOFSL's the other hand, within the largecap and midcap universe, 21% and 25% of the companies missed their estimates.
Time of India
3 days ago
- Business
- Time of India
Nifty's PAT grew 3% in Q4FY25, beat Motilal Oswal's estimates; Bharti Airtel, HDFC Bank among top 5 contributors
Live Events Q4FY25 earnings based on Mcap (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Nifty delivered a fourth successive quarter of single-digit net profit growth since the pandemic of 2020 at 3%, with heavyweights Bharti Airtel Tata Motors and HDFC Bank contributing 137% of the incremental year-on-year accretion in earnings according to estimates by Motilal Oswal which remains biased towards large-caps and domestic plays amid a volatile backdrop."Our model portfolio stance remains unchanged, with a distinct bias towards large-caps and domestic plays, given the current volatile backdrop. We are OW (overweight) on BFSI, consumer discretionary, industrials, healthcare, IT and telecom while we are underweight on Oil & Gas, cement, automobiles, real estate and metals," MOFSL uptick in Profit After Tax (PAT) was higher than MOFSL's estimates of 2% and IndusInd Bank State Bank of India (SBI), Kotak Mahindra Bank , and Grasim Industries contributed adversely to the broad-based analysis reveals 13 sectors exceeding expectations in the 4QFY25 corporate earnings, showcasing widespread outperformance across and OMCs propelled earnings growth and were followed by PSU banks, automobiles, healthcare, technology, and capital goods, fuelling this healthy performance. Conversely, Oil & Gas (excluding OMCs) and private banks dragged overall aggregate earnings of the MOFSL universe companies grew 10% YoY versus the estimates of 2% YoY in metals profit surged 45% YoY on a low 4QFY24 base while for OMC's PAT jumped 14% YoY versus estimates of a 59% decline. Earnings of PSU banks (+9% YoY), automobiles (+8% YoY), technology (+7% YoY), healthcare (+17% YoY), capital goods (+14% YoY) and consumer durables (+37% YoY) stood at 9%, 8%, 7%, 17% and 37%, respectively. As for the telecom sector, profit of Rs 500 crore was reported versus loss of Rs 2,500 contrast, aggregate earnings growth was hit by Oil & Gas (ex OMCs), which posted a profit decline of 12% YoY. Further, earnings were dragged down by private banks (-6% YoY), cement (-3% YoY) and consumers (-1%).The MOFSL review reveals that largecaps and midcaps delivered a beat while smallcaps reported a coverage universe comprising 86 largecap companies posted an earnings growth of 10% YoY while midcaps (89 companies) delivered 19% earnings growth versus estimates of 10%. The earnings were led by financials (PSU banks and NBFCs), metals, healthcare and contrast, smallcaps (122 companies) experienced a broad-based miss adversely impacted by the financials sector. The smallcap earnings dipped 16% YoY versus estimates of 11% fall. In this, 39% of the coverage universe missed MOFSL's the other hand, within the largecap and midcap universe, 21% and 25% of the companies missed their estimates.
Time of India
28-05-2025
- Automotive
- Time of India
Bajaj Auto Q4 Preview: Brokerages see modest revenue growth amid single-digit volume uptick; PAT estimates mixed
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Here's what top brokerages recommended: Motilal Oswal Axis Securities Tired of too many ads? Remove Ads Yes Securities Equirus Two-wheeler major Bajaj Auto will announce its earnings on Thursday where the company is expected to report a low single-digit revenue uptick of 2-3.5% in the quarter ended March 31, 2025, according to estimates given by four brokerages. The topline range is expected between Rs 11,705 crore and Rs 11,891 crore, the estimates the net profit is pegged in the range of Rs 1,915 crore to Rs 1,993 crore. Three brokerages expect a growth up to 3% while one expects a decline of 1.1%.The estimates have been given by Motilal Oswal Financial Services (MOFSL), Axis Securities, Yes Securities and Equirus conservative revenue estimates are given by Equirus while MOFSL has the most bullish estimates among the brokerages. While Axis Securities is estimating a PAT decline, Yes sees a marginal growth while Equirus has highest net profit figures among its volumes are expected to rise in low single digits and investors should watch out for margins, volume outlook and export Auto is expected to report a PAT of Rs 1,985 crore, marking a 2.5% YoY increase and a 6% QoQ decline. The company's sales may stand at Rs 11,891 crore, likely rising up 3.5% YoY but down 7% Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) is pegged at Rs 2,375 crore, reflecting a 3% YoY growth and an 8% QoQ dip. Meanwhile, the EBITDA margin may come around 20%, down 10 bps YoY and 20 bps total volume is expected at 11,03,000 units, a 3.2% likely rise YoY but a 10% drop QoQ.'Total volumes during the quarter grew 3% YoY, supported by 3% growth in 2Ws and 5% in 3Ws. However, the increase was entirely driven by exports, which rose 19% YoY, offsetting a 7% YoY decline in domestic demand. ASP is expected to grow 3% QoQ led by improved mix, favorable currency and price increases,' MOFSL said.'We expect the impact of lower volumes (-10% QoQ) to be offset by improved mix (higher exports + higher Pulsar sales) and favorable currency QoQ. As a result, we expect margins to largely remain stable QoQ at 20%.' the brokerage company's PAT is pegged around Rs 1,915 crore, reflecting a decline of 1.1% YoY and 9.2% QoQ. The revenue may stand at Rs 11,793 crore, likely up 3% YoY but down 8% EBITDA may rise by 2.2% YoY to Rs 2,357 crore, though it declined 9% QoQ. The EBITDA margin is likely to be reported at 20% for the quarter under review, down 10 bps YoY and 17 bps may come in at 11,02,934 units, a 3.2% increase YoY but a 10% drop QoQ.'We expect total revenues to increase by 3% YoY, led by a 3% YoY increase in overall volumes and a mild decline in ASPs due to an inferior product mix. EBITDA margin is expected to decline by 10bps/17bps YoY due to Inferior Product Mix (higher entry level 2W and EVs). (PAT may vary due to accrual of PLI benefit),' this brokerage company's net profit in Q4FY25 may come at 1,938 crore, showing a marginal increase of 0.1% YoY but an 8% decline QoQ. Revenue may stand at Rs 11,831 crore, up 3% YoY yet down 8% fell sharply to Rs 2,328 crore, representing a 41% drop YoY and a 48% decline QoQ.'Overall volumes grew 3.2% YoY/-9.9% QoQ at 1.1m units, while realizations are expected to be flat YoY/+2.6% QoQ at ~Rs107.3k/unit. This should result in revenue growth of 3% YoY/-7.6% QoQ at Rs 118.3b. We expect EBITDA margins to contract 40bp YoY/-50bp QoQ at 19.7% due to higher other expenses,' Yes said in its Q4 preview PAT is seen around Rs 1,993 crore, reflecting a 3% YoY growth and 5% QoQ decline. The net sales came in at Rs 11,705 crore, up 2% YoY but down 9% EBITDA stood at Rs 2,376 crore, marking a 3% increase YoY and an 8% decline QoQ. The EBITDA margin improved to 20.3%, rising by 22 basis points YoY and 15 basis points QoQ.'Overall volumes are -10% /+ 3% QoQ/YoY while ASPs are expected to improve 1.5% qoq due to price hikes and better mix but will decline 1.3% yoy due to adverse product mix. We expect EBITDA/Vehicle to change by + 0.7%/ - 1.7% qoq/yoy due to change in ASPs,' .Key things to look for are margins, volumes outlook and outlook on export.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
