Automobiles News

India Automobiles Q2 Earnings Preview


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Systematix Research Report

Demand momentum for both, commercial vehicle and passenger vehicle segments (albeit only in utility vehicles) remains robust, with supply constraints easing during the quarter. Two-wheeler demand is consolidating, wherein scooters and premium motorcycles (125cc+) are seeing early signs of recovery.

Prices across the commodity basket have further corrected 10-20% QoQ (15-30% YoY) in Q2 FY23. We believe the commodity cost correction and price hikes by various original equipment manufacturers would improve net pricing (especially in CVs).

For ancillaries, benefits from commodity price passthrough would aid operating margins H2 FY23 onwards. We expect QoQ Ebitda margin to expand across OEMs.

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