Auto Q3 preview: Brokerages expect subdued performance on lower volumes
Brokerages expect a subdued quarter for automobile companies due to strain on volumes and reduced profitability along with rising fuel costs. Auto sales, too, have remained muted in December, which has added to the dampening sentiment. Challenges relating to tight liquidity and low buying sentiment continue to weigh on sales growth. Here is a gist of what Kotak Institutional Equities and Motilal Oswal expect from Q3 performance of auto companies. Brokerage: Kotak Institutional Equities The research firm expects a soft quarter for auto companies. It expects revenue growth of 7 percent, while EBITDA could rise one percent and net revenue is seen rising 6 percent year on year. “EBITDA margin will likely decline by 80 bps yoy due to increase in commodity prices and higher discount levels. Suppliers will have a relatively better quarter with revenue and EBITDA growth of 11% and 6%, respectively due to exposure to the steady and profitable aftermarket. Commercial vehicle and two...
