Sector Update| 1 September 2017
Automobiles
Maruti Suzuki
CMP: INR7,813
Stock Info
Bloomberg
Equity Shares (m)
M.Cap. (INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
TP: INR8,819 (+13%)
Buy
MSIL IN
302
Domestic sales grew at a healthy 26.7% YoY to 152k
2,025/31.6
7249 / 3868
MSIL’s Aug-17 wholesales came in line at 163,701 units (est. 162,029 units), up 23.8%
5/22/55
Vol up 23.8% YoY to 163.7k units (in line v/s est. of 162k)
Financials Snapshot (INR b)
Y/E MARCH
2018E 2019E 2020E
Sales
806.0 953.5 1,100.3
EBITDA
119.2 153.4 177.4
Adj. PAT
83.4 111.3 128.4
Adj. EPS (INR)* 281.7 374.5 431.5
EPS Gr. (%)
13.3 32.9
15.2
BV/Sh. (INR)
1,371 1,620 1,912
RoE (%)
20.1 22.8
22.2
RoCE (%)
28.0 30.8
30.1
Payout (%)
37.0 32.6
31.1
Valuations
P/E (x)
27.7 20.9
18.1
P/CE (x)
20.8 16.2
14.2
EV/EBITDA (x) 17.1 12.8
10.6
Div. Yield (%)
1.1
1.3
1.4
*Cons.
YoY. YTD growth was at 17%, with residual monthly run-rate at 154.6k units.
Domestic volumes grew by 26.7% YoY to 152k (better than est. of 150k), led by growth
in compact (+52.4% YoY) and UV (+27.6% YoY) segments.
The compact segment grew 18% YoY, led by Baleno and New Dzire sales.
Mid-size segment increased 3.9% YoY, led by Ciaz, despite an increase in prices due to
higher taxes on hybrid cars post GST. Ciaz clocked sales of 6,457 units.
UVs continued their momentum, with 27.6% YoY growth, primarily aided by
incremental volumes of Vitara Brezza, which continues to enjoy a healthy waiting
period.
Export volumes declined 4.7% YoY to 11,701 units (est. of 12,000 units).
The stock trades at 27.7x/20.9x FY18E/19E consolidated EPS of ~INR281/375. Maintain
Buy.
Snapshot of volumes for Aug-17
YoY
Company Sales
Maruti Suzuki
LCVs
Vans
Mini Segment
Compact
(incl Dzire Tour)
Mid Size - CIAZ
UVs
Total Domestic
Export
Aug-17 Aug-16
163,701
730
13,931
35,428
MoM
(%) chg
FY18
estimate
17.1 1,806,406
6,000
1.9
164,170
11.0
459,683
20.8
733,103
YoY (%)
MoM
FY18
FY17
Jul-17
chg
(%) chg
YTD
YTD
132,211
23.8 165,346
-1.0 723,618 617,770
25
703
3.8 2,478
39
12,831
8.6 15,714
-11.3 65,384 64,137
35,490
-0.2 42,310
-16.3 181,248 163,264
52.4 63,116
3.9
6,377
27.6 25,781
26.7 154,001
-4.7 11,345
17.3 292,442 242,007
1.3
-16.8
-1.3
3.1
28,532
104,348
674,432
49,186
25,066
73,536
568,049
49,721
Residual
Residual
Monthly
Gr. (%) Growth (%)
Run rate
15.2
13.9 154,684
-40.9
503
8.0
12.4 14,112
11.0
11.1 39,776
25.3
-6.5
25.9
16.4
0.3
28.5
62,952
74,012 48,565
6,457
6,214
21,442 16,806
152,000 119,931
11,701 12,280
13.8
60,259
41.9
246,454
18.7 1,681,950
-1.1
124,457
-19.4
4,532
16.3 20,301
14.9 143,931
1.3 10,753
Jinesh Gandhi
(Jinesh@MotilalOswal.com); +91 22 3982 5416
Deep Shah
(Deep.S@MotilalOswal.com); +91 22 6129 1533;
Jigar Shah
(Jigar.Shah@MotilalOswal.com); +91 22 6129 1534
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Automobiles | Update
Mahindra & Mahindra
CMP: INR1,349
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
MM IN
592.6
794.7/12.4
1509 / 1142
3/6/-10
TP: INR1,625 (+21%)
Buy
Vols at 58.6k units, up 8.3% YoY (below est. of 60.5k)
Tractor volumes in-line at 16.5k, UV sales below estimates
Financials Snapshot (INR b)
Y/E MARCH
2018E 2019E 2020E
Sales
EBITDA
NP (incl.
MVML)
Adj. EPS (INR)*
EPS Gr. (%)
Cons. EPS (INR)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Valuations
P/E (x)
P/CE (x)
EV/EBITDA (x)
Div. Yield (%)
496.7 568.1 639.4
56.7
38.5
64.4
2.9
68.5
475
13.9
12.9
21.0
19.7
2.8
13.7
66.9
46.4
77.5
20.4
82.4
530
14.9
13.9
17.4
16.4
2.5
11.4
77.0
53.7
89.7
15.7
92.8
597
15.4
14.4
15.0
14.5
2.3
8.3
*incl. MVML
MM volumes increased 8.3% YoY to 68.6k units (est. of 60.5k units), supported by 22%
growth in tractors volume and 6.6% growth in UV volumes.
Tractors sales at 16.5k were in line, helped by domestic tractor sales growth of 24%
and exports growth of 4%.
UV (incl. pick-ups) sales increased 6.6% YoY to 37.2l units (est. 38.7k units).
Momentum in pick-ups continued with 18% YoY growth, while passenger utility
vehicles reported growth of 7% YoY.
LCV (>3.5t) sales declined 27% YoY, while M&HCV sales increased 45%.
3W volumes declined 17% YoY to 3,906 units (est. of 4,250 units).
Speaking on the monthly performance, Rajan Wadhera, President, Automotive Sector,
M&M Ltd. said, "We are happy with our performance in August’17 as our Commercial
Vehicles grew by 17%. Our LCV < 3.5T grew by 18% and MHCVs registered a whooping
growth of 45%. This upsurge in demand has been due to good monsoons and our rural
penetration. Our Passenger Vehicles grew by 6% and our overall sales grew by 4%. Our
brands continue to gain traction despite several external challenges. As we get into
festive season, we are confident of a good growth over the next couple of months, on
the back of our diversified product portfolio."
Rajesh Jejurikar, President - Farm Equipment Sector, Mahindra & Mahindra Ltd. said,
"We have sold 15,246 tractors in the domestic market during August 2017, growth of
24% over last year. With normal monsoon received in the country till date, we are
hopeful that it will boost the agricultural output, leading to improved tractor demand
in the festive months. In the exports market, we sold 1270 tractors."
The stock trades at 21x/17.4x FY18E/19E consolidated EPS of ~INR67/80. Maintain
Buy.
Snapshot of volumes for Aug-17
Company Sales
Mahindra &
Mahindra
UV (incl. pick-ups)
LCV
Three-Wheelers
Tractors
MoM
YoY (%)
MoM
Aug-17 Aug-16
Jul-17
chg
(%) chg
58,632 54,134
37,253 34,942
957
944
3,906
4,705
16,516 13,543
8.3 60,579
6.6 36,708
1.4
1,262
-17.0
3,777
22.0 18,832
-3.2
1.5
-24.2
3.4
-12.3
YoY
FY18
YTD
320,712
177,431
5,662
17,738
119,881
FY17
YTD
307,270
174,251
5,837
21,491
105,691
(%) chg
4.4
1.8
-3.0
-17.5
13.4
FY18
Gr. (%)
estimate
851,128
477,857
15,909
54,921
302,441
20.3
9.3
10.9
5.0
15.0
Residual
Residual
Monthly
Growth (%)
Run rate
32.5
14.2
20.5
20.7
16.1
75,774
42,918
1,464
5,312
26,080
1 September 2017
2

Automobiles | Update
Tata Motors
CMP: INR391
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/ (USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
TTMT IN
3395.9
1525/22.8
599 / 376
-4/-21/-7
TP: INR542 (+37%)
Buy
Vol up 13.8% YoY at 48.9k, above est. of 47.7k
CVs grew 18% YoY, cars declined 3% YoY
Financials Snapshot (INR b)
Y/E MARCH
2017E 2018E 2019E
Net Sales
3,009 3,817 4,238
EBITDA
363.8 562.9 612.2
NP
76.2 203.1 217.9
Adj. EPS (INR)
22.4 59.8
64.2
EPS Gr. (%)
13.3 166.5
7.3
BV/Sh. (INR)
194.7 255.7 321.1
RoE (%)
12.3 26.6
22.2
RoCE (%)
7.3 16.3
15.1
Payout (%)
1.4
0.5
0.5
Valuations
P/E (x)
17.4
6.5
6.1
P/BV (x)
2.0
1.5
1.2
EV/EBITDA (x)
4.4
2.6
2.2
Div. Yield (%)
0.1
0.1
0.1
Tata Motors’ Aug-17 sales volumes increased 13.8% YoY (+6% MoM) to 48.9k units
(est. of 47.6k units), led by healthy growth in CVs.
PV segment remained flat as cars segment volumes declined 3% YoY, while UV
segment registered growth of 51.6% YoY due to strong demand for Tata Hexa.
Total CV volumes increased 18% YoY to 34.5k units due to ramp-up of BS4 production,
across segments in domestic markets.
M&HCV sales increased 24.2% YoY to 15.2k units, while LCV sales increased 13.8% YoY
to 19.3k units (est. of 19k units).
The stock trades at 17.4x/6.5x FY18E/19E consol. EPS. Maintain Buy.
Snapshot of volumes for Aug-17
YoY
Company Sales
Tata Motors
HCV's
LCV's
CV's
Cars
UV's
Aug-17 Aug-16
48,988
15,173
19,343
34,516
11,582
2,890
43,061
12,213
17,004
29,217
11,938
1,906
YoY (%)
chg
13.8
24.2
13.8
18.1
-3.0
51.6
MoM
FY17
FY18
MoM
Jul-17
(%) chg
YTD
YTD
(%) chg
46,216
6.0 204,896 209,950
-2.4
12,796
18.6 55,434 65,458
-15.3
18,337
5.5 83,886 84,499
-0.7
31,133
10.9 139,320 149,957
-7.1
12,246
-5.4 55,826 53,344
4.7
2,837
1.9
9,750
6,649
46.6
Residual
Residual
Monthly
FY18
Gr. (%) Growth (%)
Run rate
estimate
601,192
10.9
19.2
56,614
181,537
3.2
14.2
18,015
224,614
7.5
13.0
20,104
406,152
5.5
13.6
38,119
157,026
14.6
20.9
14,457
38,015
85.9
104.9
4,038
1 September 2017
3

Automobiles | Update
Eicher Motors
CMP: INR31,713
Stock Info
Bloomberg
EIM IN
Equity Shares (m)
27.2
M.Cap.(INR b)/(USD b)
644.0/9.6
52-Week Range (INR) 29983/18006
1, 6, 12 Rel. Per (%)
6/8/37
Financials Snapshot (INR b)
Y/E MARCH 2018E 2019E 2020E
Net Income
90.8 109.6 130.5
EBITDA
29.5
35.9
43.5
Net Profit
23.2
29.7
37.5
Adj. EPS (INR) 852.9 1,092.8 1,378.9
EPS Gr. (%)
39.2
28.1
26.2
BV/Sh. (INR) 2,641 3,531 4,679
RoE (%)
37.0
35.4
33.6
RoCE (%)
33.4
32.5
31.6
Payout (%)
0.5
0.6
0.6
Valuations
P/E (x)
37.2
29.0
23.0
P/BV (x)
12.0
9.0
6.8
Div. Yield (%)
23.8
19.0
15.2
TP: INR35,854 (+13%)
Buy
RE (+22% YoY) above est; VECV (+10.3% YoY) in-line.
Record RE dispatches at 67.97k units (est. 65.5k units)
RE volumes increased 22% YoY to 67,644 units (above est. of 65,500).
VECV's overall volumes increased 10.3% YoY at 4.5k units (est. 4.6k). Domestic LMD
and HD segment grew 13% YoY and 19% YoY, respectively. However, buses volumes
declined 3.3% YoY.
VECV exports grew 8.2% to 703 units (above est. of 600 units).
The stock trades at 37.2x/29x FY18E/FY19E EPS. Maintain Buy.
Snapshot of volumes for Aug-17
YoY
Company Sales
Eicher Motors
Royal Enfield
VECV
Domestic LMD
Domestic HD
Domestic Buses
Total Domestic
Exports
Aug-17 Aug-16
67,977
4,521
2,238
851
729
3,818
703
55,721
4,100
1,981
715
754
3,450
650
YoY (%)
chg
22.0
10.3
13.0
19.0
-3.3
10.7
8.2
MoM
MoM
Jul-17
(%) chg
64,459
4,316
2,000
847
867
3,714
602
FY18
YTD
FY17
YTD
(%) chg
23.3
-16.4
-7.2
-34.4
-15.4
-15.8
-19.9
FY18
Gr. (%)
estimate
828,730
62,341
28,508
11,109
12,884
52,500
8,562
24.3
6.7
10.0
0.0
5.0
4.0
6.6
Residual
Residual
Monthly
Growth (%)
Run rate
25.0
23.3
20.9
25.6
24.2
17.9
28.2
73,185
6,000
2,743
1,143
1,121
5,008
810
5.5 316,434 256,582
4.7 20,338 24,329
11.9
9,306 10,031
0.5
3,105
4,735
-15.9
5,034
5,950
2.8 17,445 20,716
16.8
2,893
3,613
1 September 2017
4

Automobiles | Update
Ashok Leyland
CMP: INR113
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/ (USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
AL IN
2,845.9
254.0/3.8
112 / 74
3/3/-29
TP: INR118 (+5%)
Buy
Above estimates at 13.63k (+25% YoY, est. 11.95k)
MHCVs grew by 28.9% and LCVs by 13.8% YoY
Financials Snapshot (INR b)
Y/E MARCH
2018E 2019E 2020E
Sales
252.4 292.2 341.2
EBITDA
25.8 31.8
39.0
NP
15.1 20.4
26.5
Adj. EPS (INR)
5.2
7.0
9.0
EPS Gr. (%)
13.6 34.7
29.7
BV/Sh. (INR)
23.7 27.9
34.0
RoE (%)
23.2 27.0
29.2
RoCE (%)
20.5 24.7
27.1
Payout (%)
38.7 32.3
27.7
Valuations
P/E (x)
21.8 16.2
12.5
P/BV (x)
4.8
4.0
3.3
EV/EBITDA (x)
11.9
9.2
6.9
Div. Yield (%)
1.8
2.0
2.2
AL’s Aug-17 wholesale dispatches were at 13,634 units (+25.1% YoY).
M&HCV volumes, which account for 77.5% of total volumes, increased 28.9% YoY
(+17.1% MoM) to 10,567 units (est. of 8,900 units).
LCV (Dost & Stile) volumes grew by 13.8% YoY to 3,067 units (est. 3,050 units).
The stock trades at 21.8x/16.2x FY18E/FY19E EPS and 11.7/9.0x EV/EBITDA. Maintain
Buy.
Snapshot of volumes for Aug-17
YoY
Company Sales
Ashok Leyland
CV (ex LCV)
LCV
Aug-17 Aug-16
13,634
10,567
3,067
YoY (%)
chg
10,897
25.1
8,201
28.9
2,696
13.8
MoM
MoM
(%) chg
11,981
13.8
9,026
17.1
2,955
3.8
Jul-17
FY18
YTD
54,099
39,459
14,640
FY17
FY18
(%) chg
YTD
estimate
52,554
2.9 166,553
40,410
-2.4 122,466
12,144
21
44,087
Residual
Residual
Monthly
Gr. (%) Growth (%)
Run rate
14.8
21.6 16,065
8.1
13.9 11,858
38.8
50.0
4,207
1 September 2017
5

Automobiles | Update
TVS Motor
CMP: INR 609
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/ (USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
TP: INR612 (+1%)
Buy
TVSL IN
475.1
Healthy growth in scooters offsets fall in motorcycles
235.5/3.7
549 / 280
4/31/69
TVS Motor’s Aug-17 sales of 317.6k units (+15.8% YoY, 17.1% MoM) were above
At 317k (+15.8% YoY), volumes exceed estimate of 298k
Financials Snapshot (INR b)
Y/E MARCH
2018E 2019E 2020E
Sales
145.5 173.2 202.9
EBITDA
11.1 17.1
21.4
Adj. PAT
6.8 11.3
14.6
EPS (INR)
14.4 23.7
30.7
EPS Gr. (%)
22.7 64.6
29.5
BV/Sh (INR)
61.5 79.8 104.5
RoE (%)
25.7 33.6
33.3
RoCE (%)
25.9 35.8
39.0
Payout (%)
25.0 22.8
19.6
Valuations
P/E (x)
42.2 25.7
19.8
P/BV (x)
9.9
7.6
5.8
EV/EBITDA (x)
27.0 17.3
13.4
Div. Yield (%)
0.5
0.7
0.8
estimate of 298k.
Domestic volumes increased 13.2% YoY, while exports (14% of volumes) grew 23.7%
YoY.
Scooter volumes increased by healthy 49.3% YoY (+23.8% MoM) to 114.3k units (est.
of 95k units).
Mopeds dispatches increased after fourth months (up 7.8% to 82.8k v/s est. of 70k).
However, motorcycle volumes declined 2% YoY (+2.3% MoM) to 111.9k units (est. of
125k).
3Ws volume increased 26.9% YoY, led by growth in domestic volumes and exports.
Total exports rose 33.7% YoY, led by growth in 2W and 3W exports.
The stock trades at 42.2x/25.7x FY18E/FY19E EPS. Maintain Buy.
Snapshot of volumes for Aug-17
YoY
Company Sales
TVS Motor
Motorcycles
Scooters
Mopeds
Three-Wheelers
Total Domestic
Total Exports
Aug-17 Aug-16
317,563 274,303
111,927 114,195
114,354 76,572
82,865 76,903
8,417
6,633
271,959 240,206
45,604 34,097
YoY (%)
chg
15.8
-2.0
49.3
7.8
26.9
13.2
33.7
MoM
MoM
FY18
FY17 (%)
Jul-17
(%) chg
YTD
YTD chg
271,171
17.1 1,390,842 1,237,269 12.4
109,427
2.3 551,404 491,698 12.1
92,378
23.8 464,304 340,919 36.2
61,531
34.7 341,845 372,722 -8.3
7,835
7.4
33,289
31,930
4.3
220,214
23.5 1,169,054 1,059,918 10.3
50,957
-10.5 221,788 177,351 25.1
Residual
Residual
Monthly
FY18
Gr. (%) Growth (%)
Run rate
estimate
3,392,800
16.1
18.8 285,994
1,317,640
22.9
31.9 109,462
1,078,268
23.8
15.9 87,709
912,534
0.2
6.1 81,527
84,358
21.8
36.8
7,296
2,851,660
14.1
16.9 240,372
541,140
27.1
28.5 45,622
1 September 2017
6

Automobiles | Update
Bajaj Auto
CMP: INR2,919
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Financial & Valuation (INR b)
Y/E MARCH
2018E 2019E
241
271
Sales
44.8 53.0
EBITDA
39.7 47.3
NP
Adj. EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuation
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
137
3.7
648
22.2
21.5
57.0
21.3
4.5
15.4
2.2
164
19.2
713
24.0
23.3
60.0
17.8
4.1
12.7
2.7
BJAUT IN
289.4
840.6/13.1
3122/2366
2/-6/0
2020E
308
62.3
55.2
191
16.7
761
25.9
34.5
75.0
15.3
3.8
10.7
4.2
TP: INR3,281 (+12%)
Buy
In-line at 335k (est. 337k); +3.0% YoY
Domestic volumes decline 5.8% YoY; exports down 8% YoY
BJAUT’s Aug-17 sales were 335k units (in line with est. of 337k units), +3% YoY.
Domestic volume remained flat at 200.6k units, while exports increased 7.5% YoY.
Overall FY18 volume est. at 3.91m asks for a residual monthly run-rate of 339.9k units.
Overall motorcycle volumes increased 1.4% YoY as domestic motorcycle dispatches
declined 1.7% YoY to 171.6k due to continued pressure on growth. Motorcycle exports
grew 6.7% YoY to 112.2k units.
Management indicated improvement in sales in the months to come. As per S
Ravikumar, President - Business Development “Bajaj Auto is upbeat on the exports
getting back on track and expects exports of 1.7 million units in FY18 versus 1.41
million units in FY17. He said, geographies like Philippines, Latin America, Egypt, East
Africa, Nepal have stabilized. Currency and retail sectors have stabilized in Nigeria.”
3W volumes witnessed recovery, with overall volume growing 12.6% YoY. Domestic
3Ws volume returned to positive growth trajectory after nine months, growing 13.3%
YoY, while 3W exports continued the growth momentum (+11.8% YoY) for the fifth
consecutive month.
The stock trades at 21.3x/15.3 FY18E/19E EPS. Maintain Buy.
Snapshot of volumes for Aug-17
YoY
Company Sales
Bajaj Auto
Motorcycles
Total Two-
Wheelers
Three-Wheelers
Domestic
Exports
Aug-17 Aug-16
MoM
(%)
FY18
chg estimate
-7.2 3,910,922
-7.9 3,446,114
-7.9 3,446,114
-2.6
464,808
-15.3 2,348,816
6.0 1,562,106
YoY (%)
MoM
FY18
FY17
Jul-17
chg
(%) chg
YTD
YTD
335,031 325,347
3.0 307,727
8.9 1,531,192 1,649,913
283,861 279,911
1.4 265,182
7.0 1,324,757 1,437,978
283,861 279,911
51,170 45,436
200,659 200,314
134,372 125,033
1.4 265,182
12.6 42,545
0.2 186,497
7.5 121,230
7.0 1,324,757 1,437,978
20.3
7.6
10.8
206,435 211,935
866,065 1,022,420
665,127 627,493
Residual
Residual
Monthly
Gr. (%) Growth (%)
Run rate
6.7
18.0 339,961
7.0
19.0 303,051
7.0
4.2
4
10.7
19.0
10.4
20.3
14.4
303,051
36,910
211,822
128,140
1 September 2017
7

Automobiles | Update
Hero MotoCorp
CMP: INR4,047
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/ (USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
HMCL IN
199.7
635/9.5
3813 / 2844
9/-1/4
TP: INR3,818 (-6%)
Neutral
In line at 678.8k (est. 690k); growth of 10.1% YoY
Financials Snapshot (INR b)
Y/E MARCH
2018E 2019E
Sales
321.9 346.6
EBITDA
52.5 54.0
NP
37.8 39.8
Adj. EPS (INR) 189.3 199.1
EPS Gr. (%)
12.0
5.1
BV/Sh. (INR)
587.2 677.8
RoE (%)
34.6 31.5
RoCE (%)
33.4 30.5
Payout (%)
321.9 346.6
Valuations
P/E (x)
21.4 20.3
P/BV (x)
6.9
6.0
EV/EBITDA (x) 13.9 13.3
Div. Yield (%)
2.2
2.2
2020E
379.9
59.0
43.6
217.9
9.5
785.6
29.8
29.0
379.9
18.6
5.2
12.0
2.2
HMCL’s August-17 volumes of 678,797 units (+10.1% YoY) were in line with our
estimates of 690,000 units.
This was due to strong retail off-take in key traditional markets and inventory build-up
to meet festive demand.
HMCL trades at 21.4x/20.3x FY18E/19E EPS. Maintain Neutral.
Snapshot of volumes for Aug-17
Company Sales
Hero MotoCorp
MoM
Residual Residual
Growth Monthly
YoY (%)
MoM
FY18
FY17
(%)
FY18
Aug-17 Aug-16
Jul-17
Gr. (%)
Run rate
(%)
chg
(%) chg
YTD
YTD
chg estimate
678,797 616,424
10.1 623,269
8.9 3,151,441 2,893,926 8.9 7,435,906
11.6
13.6 612,066
YoY
1 September 2017
8

Automobiles | Update
NOTES
1 September 2017
9

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
Automobiles | Update
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities
in the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a)
from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities
and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other
potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned
in the research report.
Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject
company in the past 12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
d)
Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.
MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a
Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. MOSL and / or its affiliates do and seek to do business including investment
banking with companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report.
Compensation of Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted
to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOSL. The report is based on the facts, figures and information that are
considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such
information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to
change without notice. The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for
the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly
or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Disclosure of Interest Statement
Analyst ownership of the stock
Companies where there is interest
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to
subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC)
pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement
with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to
SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting
Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL
is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S.
persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the
"Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning
agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and
therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is
a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined
in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other
person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or
solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy
is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their
own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make
such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its
own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options,
another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy,
completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be
treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may
be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent
in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this
report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed
therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any
purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be
eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its
directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with
the use of the information.
The person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to
hold MOSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be
suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers
wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
1 September 2017
10