Auto, Ancillaries Q4 Earnings Preview - Input Cost Rise Vs Operating Leverage Gains: ICICI Securities
An employee places an automobile windshield wiper mechanism into a shipping box. (Photographer Oliver Bunic/Bloomberg)

Auto, Ancillaries Q4 Earnings Preview - Input Cost Rise Vs Operating Leverage Gains: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

The auto industry has witnessed wholesale despatches taper off post a strong festive season.

As states opened up further to reach normalcy, component shortages (e.g. semiconductors) has led to original equipment manufacturers focussing on raising channel inventory (e.g. two-wheelers at approximately four to six weeks) to manage potential production issues.

On the consumer side, two-wheeler dispatches fared worse (~-8% decline QoQ) than passenger vehicles (~-1% decline QoQ) due to delay in wedding season (relevant for North India).

Tractors demand moderated due to seasonality.

On the commercial side, commercial vehicles have started to witness moderate improvement (up ~10% QoQ).

Click on the attachment to read the full report:

ICICI Securities Q4FY21 Auto_Preview.pdf

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