Stocks in our universe likely to see the maximum upside to earnings estimates driven by upside to volume estimates are Maruti Suzuki & Ashok Leyland. Both the stocks could see highest upgrades to FY16/17 EPS of ~15/25% in a positive macro environment", says Emkay.
We look at possible impact to our EPS estimates for OEMs in a scenario of sustainable >7% GDP growth and <5% inflation
Maruti Suzuki and Ashok Leyland could see highest upgrades to FY16/17 EPS of ~15/25% in a positive macro environment
Previous up-cycles point to successive years of >20% growth for CVs and PVs, outperforming the two wheeler peers
We see upside to our volume estimates; margins and trading multiples might not increase materially over the base case
Four wheelers can see meaningful recovery
While we might understandably remain somewhat conservative given lack of on-theground signals of demand revival, investors are already anticipating sharp turnaround in macro and micro environment driven by a stable, development-focused government at the centre. Our analysis of the macro and sector growth data of the last 15 years, indicates that if GDP growth rates could inch back to a sustainable >7% with inflation controlled at <5% we could see (a) high growth rates in all auto segments for consecutive years on the back of latent demand and successive years of low growth (b) trend growth rate of the sectors itself improving back to the like of the previous boom (FY03-FY08) on structural improvements in macro variables like a higher GDP growth rate, higher fixed capital formation, lower inflation and higher ratio of capital spending to total govt. spending.
Maruti & Ashok Leyland key beneficiary
"In our bull case scenario, we focus more on possible surprises in volumes from a much improved demand environment and the consequent impact on EPS estimates. We do not reckon that our margin estimates would change materially for the coverage universe (a) given increasing competitive intensity (b) commodity environment has already been benign for a year now. Further, companies under our coverage, except the deep cyclical (like CVs), are making margins in-line with what they made in the previous good times. Moreover target/trading multiples in the bull case are not going to change materially over the base case - something which sectors like capital goods, infrastructure and banking could see driven by balance sheet improvements.
"Stocks in our universe likely to see the maximum upside to earnings estimates driven by upside to volume estimates are Maruti Suzuki & Ashok Leyland", says Emkay Global Financial Services research.
For all recommendations, Click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here
Anda sedang membaca artikel tentang
Maruti, Ashok Leyland can see good growth by FY16/17: Emkay
Dengan url
https://untukkesehatanda.blogspot.com/2014/05/maruti-ashok-leyland-can-see-good.html?m=0
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Maruti, Ashok Leyland can see good growth by FY16/17: Emkay
namun jangan lupa untuk meletakkan link
Maruti, Ashok Leyland can see good growth by FY16/17: Emkay
sebagai sumbernya
0 komentar:
Posting Komentar