Reliance Money has recommended a sell rating Tata Motors, Mahindra and Mahindra, Maruti Suzuki India, Ashok Leyland target price of Rs 120, Rs 266, Rs 504, Rs 12 respectively in its April 09, 2009 research report.
Reliance Money’s report
Passenger vehicle sales numbers for the month of March 2009 came out to be better as expected. Sales of companies have shown growth during the month of March 2009 as the excise benefit along with improvement in financing situation by PSU banks has led to improvement in volumes. The CV segment demand is still under pressure but with the announcement of excise benefit for CV’s in the interim budget and extension of accelerated depreciation policy, volumes have grown on a sequential basis. The LCV segment which was recently been offered the excise cut benefit has shown improvement with volumes of TAMO and ALL in LCV segment showing positive growth in the month of March 2009.
We believe that in the coming few months MSIL will report a fall in the M800 and C segment sales as TAMO’s Nano is likely to eat out the market share of the small car segment. Apart from this for CV segment we maintain our negative outlook as a we do not expect an immediate recovery, which will be strong enough to report y-o-y growth. However, we remain optimistic that the CV volumes will continue to grow on sequential basis. In the coming few months the PV industry is expected to see new launches by many players and we expect the volumes to improve for those companies on the back of new launches. However, we don’t expect the volumes to grow sharply as seen in the last 3 months. Excise benefit, lower fuel prices are likely to help companies in posting good numbers but not good enough to show exceptional growth. We are expecting MSIL to report marginal growth in the coming months as the C segment and M800 segment is likely to witness a fall on the back of bookings getting booked for Nano.
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