| However, net profit increased by only 10 per cent due to higher interest costs. The report expects the company to show a CAGR of 21 per cent and 27 per cent in sales and profits over FY05-07E respectively. |
| Tata Motors: LCV segment sales up |
| Enam Securities rates Tata Motors as "neutral", relative to the sector. In its results update, the report states that the company's net sales increased 15 per cent y-o-y in Q2 due to muted performance of medium & heavy commercial vehicles, which witnessed a de-growth of four per cent. |
| However, strong growth in the light commercial vehicle segment (domestic sales up 55 per cent and export sales up 86 per cent) coupled with seven per cent y-o-y growth in the car segment assisted the overall volume growth by 12.4 per cent. |
| EBITDA margin declined by 50bps to 12 per cent due to change in the product mix getting more skewed towards the LCV segment and lower contribution from higher-margin M&HCVs. |
| Ace has driven the LCV sales and its share has increased from five per cent to 14 per cent of total sales in Q2. Company's PAT grew by 9.3 per cent to Rs 340 crore. The company is likely to report flat y-o-y M&HCV volumes in FY06, which will impact earnings growth. The stock trades at 12x FY07E and 11x FY07. |
| Hero Honda: Dip in operating margins |
| Enam Securities rates Hero Honda as "neutral", relative to sector. The company declared revenues of Rs 2170 crore (23 per cent growth y-o-y), EBIDTA of Rs 330 crore (21.3 per cent) and adjusted PAT of Rs 240 crore (22.4 per cent) during Q2. |
| The company's market share has improved by 100 bps sequentially in the motorcycle segment. Despite better control on other overheads, higher raw material cost led to a marginal dip in operating margins. |
| However, lower raw material cost growth (q-o-q) has been a positive surprise. The stock trades at 16.2x FY06E. |
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