Auto, Auto Ancillary Q1 Results Preview - Decline In QoQ Volumes, High Input Costs To Weigh: ICICI Direct

Auto body parts wait to be shipped in Warren, Michigan, U.S. (Photographer: Jeff Kowalsky/Bloomberg).

Auto, Auto Ancillary Q1 Results Preview - Decline In QoQ Volumes, High Input Costs To Weigh: ICICI Direct

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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 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.

Click on the attachment to read the full report:

ICICI Direct Auto Ancillary Q1FY22 Results Preview.pdf

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