Auto, Auto Ancillary Q1 Results Preview - Decline In QoQ Volumes, High Input Costs To Weigh: ICICI Direct
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ICICI Direct Report
The auto industry broadly encountered healthy demand conditions in Q1 FY22 barring May, where state-specific lockdowns amid Covid-19 resurgence played spoilsport.
Total industry volumes are expected to have declined ~33% sequentially, with the commercial vehicle space bearing the brunt of the drop-off and tractor space having outperformed given supportive macroeconomics.
Topline performance is expected to be slightly better than industry volume trends given broad-based price hikes but margins are seen declining across the board amid no respite in commodity cost inflation (metals, rubber, plastics).
We expect our coverage universe (excluding Tata Motors Ltd.) to report top line decline of 21.6% QoQ along with ~210 basis points QoQ Ebitda margin decline and profit after tax de-growth of 31.4% QoQ.
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