Autos: Demand For PVs/CVs Stays Strong: Motilal Oswal Report

The demand momentum in passenger vehicles (PVs) is expected to sustain, supported by the gradual easing of supply-side issues, Motilal Oswal has said in a report.

"Recovery in M&HCVs is expected to gain momentum, benefitting from improving viability among fleet operators as well as improving demand from the Haulage and Infra segments. We expect demand for 2Ws to recover only towards 1QFY23, driven by rabi cashflows. We expect volume recovery to sustain beyond FY22, with 2W/PV/tractor volumes seeing an 11%/17%/1% CAGR over FY22-24E. For 3Ws/LCVs/M&CVs, we expect a volume CAGR of 12%/19%/25% over FY22-24E," the brokerage has noted.

"The EBITDA margin for our OEM Universe (excluding JLR) is likely to recover by 40bp QoQ to 8.6% in 3QFY22 (-350bp over 3QFY21), led by operating leverage and price increases offsetting higher QoQ commodity costs. Barring 2W OEMs and MM, all other OEMs are likely to report QoQ margin improvement. On a YoY basis, only AL and TVSL would report moderate improvement in margins," the brokerage has further added.