7 Stocks From The Automobile Sector You Can Buy Post Q1 Results

Sharekhan has come up with its latest report on the automobile sector, reviewing the quarterly results. Here are 7 stocks that the brokerage has a buy post the Q1 results.

Ashok Leyland, buy for a price target of Rs 181

The brokerage has a buy call on the stock with a price target of Rs 181. "Q1FY2023 reported weak numbers, largely due to lower volumes and negative operating leverage. Volumes declined led by seasonality, which is likely to recover going forward. EBITDA and PAT for Q1FY2023 declined by 58.7% q-o-q and 87.2% q-o-q, respectively. We retain our Positive outlook on the business and expects volumes to recover. We maintain our estimates and Buy rating on the stock," the brokerage has said.

Bajaj Auto

The firm has set a price target of Rs 4800 on the stock of Bajaj Auto, which is significantly higher than the price target of Rs 4061. The stock now has the potential to gain at least 20% from current levels.
Bajaj Auto Limited (BAL) reported strong operational performance for Q1FY2023, led by higher average sales realisation, improved USD realisation, and better product mix, despite higher input costs. Net revenue, EBITDA, and PAT were 7.9%, 10.7%, and 10.5% above our expectations, respectively. We maintain our estimates and Buy rating on the stock," Sharekhan has said.

HeroMoto Corp

The brokerage has set a price target of Rs 3210 on the stock of this two wheeler major. :Hero MotoCorp Limited's (Hero's) Q1FY2023 results missed expectations due to commodity headwinds and lower other income. Net revenue, EBITDA, and PAT were below expectations by 2.1%, 4.6%, and 13.4%, respectively. We maintain estimates and price target," the brokerage has said.

Maruti Suzuki: Buy for a price target of Rs 10,200

Sharekhan has set a price target of Rs 10,200 on the stock of Mauti. "The company reported lower-than-expected operational performance in Q1FY2023, led by higher commodity prices, higher sales promotion expenses, and lower non-operating income. Revenue, EBITDA, and PAT grew by 49.1% y-o-y, 132.9% y-o-y, and 129.8% y-o-y, respectively. New launches in the SUV segment have received positive response from customers, leading to upgrade in estimates. We have revised our estimates and price target upwards," the brokerage has said.

Tata Motors

The firm also has a buy target on the stock of Tata Motors with a price target of Rs 516. "Tata Motors Q1FY2023 results were disappointing, lagged by poor performance of JLR business. The company reported consolidated net loss of Rs. 6,500 crore in Q1FY2023, as against net loss expectation of Rs. 1,385 crore. We expect JLR volumes to recover, driven by robust order book and new launches. We maintain our estimates and rating, driven by expected recovery in volumes and operational improvement across its business verticals and geographies," the brokerage has said.

TVS Motors: Buy with a price target of Rs 1,100

TVS Motor's Q1FY2023 results were ahead of market estimates with revenue, EBITDA, and PAT beating estimates by 1.3%, 2%, and 10.9%, respectively. "TVS Motors delivered strong EBITDA and PAT growth of 119% y-o-y and 285% y-o-y, respectively, in Q1FY2023. The company continued to maintain its EBITDA margins in double digits in the quarter and is expected to improve further, led by product mix, positive operating leverage, and cooling of commodity prices. We have revised our estimates and price target upwards to build improved margin profile of the company," the brokerage has said.

Buy the stock of Mahindra and Mahindra, says Sharekhan

Mahindra and Mahindra Ltd. (M&M) delivered another strong quarter in Q1FY2023. "Revenue, EBITDA, and PAT growing by 66.7% y-o-y (14.5% q-o-q), 43.5% y-o-y (20.3% q-o-q), and 67.2% y-o-y (10.7%
q-o-q), respectively, fueled by strong sales and margin expansion. However, the company missed PAT expectations by 5.4%. New launches received strong response. We have increased our estimates and price target, factoring positive outlook for its core UV
brands, healthy rural demand, and improving performance of key subsidiary companies," Sharekhan has said.