Auto, Ancillaries Q4 Earnings Preview - Strong Recovery On Cards: KRChoksey
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The auto sector should see robust revenue growth and improved Ebitda margins in Q4 FY21 led by recovery in rural demand, healthy festive retail sales and low base effect owing to economic slowdown.
After months-long factory closure, lay-offs and slump in car sales during first half of FY21, the fall in vehicle sales were moderate in Q4 FY21, however, the performance differed across segment.
Rural and semi-urban demand remained robust supported by higher kharif crop, better cash flows and good rabi sowing that ultimately drove strong demand for tractors, two-wheelers, and entry level cars.
After unlock, most original equipment manufacturers have spent first half of FY21 in restoration of supply chain.
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