Download - India TwoWheelers Dec2011

8/19/2019 India TwoWheelers Dec2011

1/30

India Automobiles – Two Wheelers

Strictly Private & Confidential

Dec 2011

Allegro Capital Advisors Pvt Ltd


2/30

!"#$%& $()*%&+

!"#$% '()#*+,

%*-#*%

'./0.*%*1+,

1")*+/#++#.*+ %1'2

,-&$.$"#$/0/&

3%454/*678-4#"0/&

1*/-(*2&-%0%9371:

;0*60%+<

34445 6%)7%"+ #*

6./%+1#' /)"8%1

=->?;0*60%+@A$-2B

;$"0+&42.-+&$"0%+

!"# %&'&()*(+"'*( ,-. !"#&) +'

)/)*0 *)&*1

Two Wheelers – An Introduction

2Strictly Private & Confidential

1*/-(*2&-%0%

9445 07):%"+2

2*1(+'314 5")3+'314(+)&1 &(2.

C*D 1*&0%4*6=-##640%+

67&&( 8&(*04*0/8+'/8 &(2

;>? @"

1A"*.$%" B#1(

C929D* A*#1+ #*

EFCC

9 07):%"+ )''.A*1

G." H4I .G /)"8%1

+()"%

)$4/&+

C34445 6%)7%"

1.A'( 0.#*1+

=0%E420.0/&0%+

?%: "%$%*A%

-%*%")1." G."

6%)7%"+

!/&0%/*&4$/*6.-+&$"0%+

?%: /)"8%1+ J

KG"#'), L)1#*

K/%"#') )*6 M.A1(

N)+1 K+#)

M.A"'%O K@N, K77%-". @)7'A7)1#.*+2

9 :&*0&) '/8;&)1 *)& 5") 0+1(&< %0*=&)1.

P"#/)": QA+#*%++ /.6%7

#+ )00.#*1%6 6%)7%",

1(.A-( MAQ+#6#)": /.6%7

)7+. A+%6


3/30

Two Wheelers – An Overview (1)

!"#$ &'(#$) *$+",'- ./0 1)$2#3

!"#$

&$'$

()*

+,-,-

./'$

!$01,

&$'$#2

34*

567

&$'$#2

)*

8,9,:,4*

;':"#2

)4* 4/,,1,.< 4/$-/ %--*(") 5*.BC8 *5 )/, )*)%1 0*1(2,


4/30

Two Wheelers – An Overview (2)


5/30

Two Wheelers – Industry Analysis

•T$3/ #,2%"# UVW•X$2$),#


6/30

Buyer Power – Moderate (1)

>',./0 K+$-' #$ L/8+'D?$/ ;$?/#MN$2') * BO(*

?*

>*

3?*

3>*

@?*

@>*

A8?> A8?B A8?< A8?C A8?) A83? A833 A83 @W A 83(W

5$',G @P &$'$VTVG"2 ]2 &,G" Q$Y/G,'S$0

7V$$'"#2 ]2 A"9,G" Q$Y/G,'S$0

OEE$)#"/?#: 'D?-#- ?/ P/?-'D K.#'@$): 6&($$#')-7

9>?@AB M*)+*(+"'1 +' 2*02/0*(+"' &N+1( *8"'3 *3&'2+&1.


7/30

Buyer Power – Moderate (2)

>$,'-#?( *$+",' 1)$2#3 ?- )$/@ >'-E?#' . '.0: L/()'.-' ?/ ;)?('- Q N'-- C+.-#?(

)??

3???

33??

3@??

3(??

34??

3>??

B

C

3?

3@

34

3B

3C

@?

A8?> A8?B A8?< A8?C A8?) A83? A833

=3?*

=>*

?*

>*

3?*

3>*

@?*

@>*

(?*

?

@

4

B

C

3?

3@

34

A8?> A8?B A8?< A8?C A8?) A83? A833 A83@D85EF


O+37 :&8*'


8/30

Supplier Power – Value Chain (1)

,-&$.$"#$/0/&

7R#$%&+

•E")-/%*1%6 )*6 +/)77 +#[%62

•M1"#*-%*1 \A)7#1: @.*1".7

•L%*-1(: K00".$)7 P".'%++

•L.*- V%"/ @.*1")'1+

•!%0%*6%*'% .* ]ND G." V%'(*.7.-:

;*0A1+

•E."/+ C4J94I .G=%$%*A% G."

@./0.*%*1

D)*AG)'1A"%"


1*/-(*2&-%0%

9445 07):%"+ )+

'./0)"%6 1. CC5

]ND+

3%454/*6 78-4#"0/&1*/-(*2&-%0%+ 9371+:

;0*60%+ @ =0%E420.0/&0%+ 9C0#6*20"0/&

1*%S0&:

•!%0%*6%*': .* ]ND G."

!%)7%"^M%"$#'% @%*1%"

K''%++


9/30

Supplier Power – Weak (2)

• @,I,"#,"-, *5 \Q]< 5*. .,0,"(,N .,#(-,<A%.3%$"$"3 I*4,. *5


10/30

Degree of Rivalry – Moderate-Strong

4.)5'# &3.)' 6O(# WXX7 Q O+?@$E$+?-#?( I.#")' K$,E'#?#?H' L/#'/-?#: ?- L/()'.-?/@

@4??

@4

@>>?

@B@>

@


11/30

Threat of New Entrants – Moderate-Weak

• E/, $"$)$%1 $"0, 1%.3,D _())/, )$2, )%H," -%" A, %">4/,.,A,)4,," 6B?JM 2*")/'.+')-3?E I'#2$)5


12/30

Threat of Substitutes – Weak

AD$ IB0060% N$-% IB0060%'0,.%3, G] I,. %""(2 U7C e 7K=W a6J= a6J=

'0,.%3, ]$1,%3, =C 6=

X$),.< *5 P,).*1 9*"$,?/.#' K$,,"#')


13/30

Export Business – Overview of Major Markets (1)

.$"#*/T ;0+&4/*&4$/ L0T F%*/U+ 7R#$%&0U

T,.* ]*)*9*.I _%"31%#,


14/30

=3GAM 7,=A ,=!, K,A!Q ,17C!.,

Export Business – Overview of Major Markets (2)

&.+'- 6WUUU "/?#-7 4.)5'# &3.)' $8 9': ;+.:')- • _.%Z$1 $< % H,> 2%.H,) %2*"3 6CC?6=C-- A$H,< 4/$-/ $< % I*,.(*

8,9,:,J

(3VV = @>?VV @>3VV = 4??VV a4?3VV


15/30

Investment Thesis – Domestic Business

*

A8 ?> A8 ?B A8 ?< A8 ?C A8 ?) A8 3? A8 33 A8 3@ W A8 3(W

5$',G @P &$'$VTVG"2 ]2 &,G" Q$Y/G,'S$0

7V$$'"#2 ]2 A"9,G" Q$Y/G,'S$0

N$2') ;'/'#).#?$/ Q >',./0 .# ./ L/8+'(#?$/ ;$?/# G").+ \ &',? G").+ #$2/- ?++ N.@ZCDE'(#'0 #$ 1)$2

?*

3?*

@?*

(?*

4?*

M/#,G 5 $I02 5 S"# K KK 5 S" # K K &"' #$2

Q"0"'#,'S$0 ,V#$22 K01S,


M.A"'%O R7../Q%"-, D'?#*+%:, @./0)*: !)1), =R;, K77%-". @)7'A7)1#.*+

N$2') >'E'/0'/(: $/ ]?/./(' Q L/()'.-' ?/ !88$)0.J?+?#:&($$#')^- #$ O"#E')8$), L/0"-#): ./0 N'.0 1)$2#3


16/30

Investment Thesis – Export Business

=3?*

?*

3?*

@?*

(?*

>

C

33

34

3<

@?

A8?C A8?) A83? A833 A83@W A83(W A834W A83>W

CDE'(# *$+",'- #$ @)$2 J: X_V K!1G #$ ]BX`

Q*W+U I*W*W4 J: I*W*W L/(" _ `Na0."1+ 1. .A1+1"#0 6./%+1#' +)7%+#* 1(% *%)" GA1A"%b2%a0."1+ B#77 0".Q)Q7: '.*1"#QA1% 9>I .G +)7%

#* EFC3c

L'+0 :/*4 6MP DJ*)S&(+'3 *'< 6*0&1H O&)" J"("C")% _ `X% )"%7..8#*- )1 )* %a0.*%*1#)7 #*'"%)+% #* %a0."1 *A/Q%"+2 ;* >Jd

:%)"+ .G 1#/%, B% )#/ 1. +%77 ) /#77#.* Q#8%+ S%$%": :%)"T #*

#*1%"*)1#.*)7 /)"8%1+, B(#'( B#77 Q% C4I .G .A" 1.1)7 QA+#*%++c

J*'*3&8&'( X/"(&1 "' AN%")( 6()*(&3=


5I$ P:""G"# 6$G/9"2 D&SGS$02F * H#$I':

@#" #7&&0&) 8*'/5*2(/)&)1 *)& 17"#+'3 *' +'2)&*1&< 5"2/1 "' &N%")(1 (" 2"'()+;/(& (" (7&+) ("% 0+'&.

M.A"'%O R7../Q%"-, D%6#), @./0)*: !)1)

;-&T 7/&4&60"0/& )*++ F$$S 9;7)F: =2B0"0J

• E/, @QP_


17/30

=3?*

?*

3?*

@?*

(?*

>

C

33

34

3<

@?

A8?C A8?) A83? A833 A83@W A83(W A834W A83>W

C?*


18/30

Investment Thesis – Summary of Key Points

;317=A!. 1,CL7A 7[)3CA 1,CL7A=

)3=!A!P7=

!X*4 I,",).%)$*" *5 )4* 4/,,1,.< $" !"#$% j X*4,. $".(.%1 %"# %"# %##.,


19/30

Companies – Recommendation Summary

.$"#*/T 1.,)!QC92%:

.1) 7)= O%$D&B )@7 7P@7F!A;, C37 A*%50&)%420

G#+4U0 C*&4/5NHW\7 NHW]7 NHW\7 NHW]7 NHW\7 NHW]7 NHW\7 NHW]7

_%`%` '()* =CNCCC 6RJ7 ?6C8 a8 6KDJ 6MDB 6=DJ 66DB =78 MR8 6R== F,().%1

T,.* ]*)*9*.I M6NKCC JC=a =8 6B8 J6D6 6RDa 6KDM 67D= Ma8 MB8 JCRB m"#,.4,$3/)

Eb+ ]*)*.< JNR76 =B RB8 768 6JDC aDJ 6=Da KD6 Ja8 768 R7 \0,.4,$3/)

!QC 9.%: F*^*^ ,-&$ M0%$ 1$&$.$%# AP= 1$&$%+


+*(.-,i _1**2A,.3N '9QN '11,3.* 9%1-(1%)$*"<

=*60+ 6aNR=a JJN7Ba J=NJ=6 J7N6Ma JRNM7R F' RNKBR BNa67 6CNJC=

=*60+ O%$D&B JM8 678 678 JJ8 6a8 F' JM8 6K8 6M8

7F!A;, 7NB7J MN6a7 MNKa7 7NMM6 MN67K F' =6J KCK KBR

7F!A;, 1*%54/ 6a8 6a8 6a8 6=8 6=8 F' R8 R8 R8

,U^ ),A 7NCa7 7N7B= 7N=Ka JNJaK JNBR6 F' J76 JaJ 7MM

),A 1*%54/ 6K8 6=8 6M8 6C8 668 F' 78 78 78

),A O%$D&B 6B8 a8 K8 6a8 JC8 F' 6a8 JR8 6B8


20/30

FG=!Q7== 13;7K V )C3;G.A 1![J

]9'P U!F; -.W =CNCCC

Qb U!F; -.W MaNRaK

9]P U!F;W 6RJ7

=J?4,,H /$3/ 6BJJ

=J?4,,H 1*4 66KK

PQ 6MDM

Qb[Q_!E@' 6BDC

Bajaj Auto - NEUTRAL

9]P U!F;W 6RJ7

E%.3,) P.$-, U!F;W 6R=M

mI


21/30

Bajaj Auto

F*6*/20 =B00& 9!QC .%: 1*%?`a 1*%? b̀ 1*%?W` 1*%?WW

+/%., 9%I$)%1 6M= 6M= 6M= JBa

;,


22/30

FG=!Q7== 13;7K V )C3;G.A 1![J

]9'P U!F; -.W M6NKCC

Qb U!F; -.W M7NC6a

9]P JC=a

=J?4,,H /$3/ JJ=C

=J?4,,H 1*4 67RK

PQ 6aDR

Qb[Q_!E@' 6RDa

Hero MotoCorp - UNDERWEIGHT

9]P U!F;W JC=a

E%.3,) P.$-, U!F;W JCRR

mI@*()*

)*

*%0 $ /5 * 0%/

Q#$9$'"#

H#$/Y

K02'S'/'S$02

L$0 =

K02'S'/'S$02

L 7H C 7.3117Q;,A!3QJ GQ;7CI7!OMA

b%1(%)$*"< %., %) /$


23/30

Hero MotoCorp

F*6*/20 =B00& 9!QC .%: 1*%?`a 1*%? b̀ 1*%?W` 1*%?WW

+/%., 9%I$)%1 MC MC MC MC

;,


24/30

FG=!Q7== 13;7K V )C3;G.A 1![J

]9'P U!F; -.W JRCC

Qb U!F; -.W 7MBC

9]P =B

=J?4,,H /$3/ RB

=J?4,,H 1*4 MM

PQ 66DK

Qb[Q_!E@' 6JDM

TVS Motors - OVERWEIGHT

9]P U!F;W =B

E%.3,) P.$-, U!F;W R7

mI??\ =

&T2$#"J \,#0,',Z, 3O@> &0 =

!$2/#J 5,9SG L,1/ 3O@> &L =

• G,> 0%1(%)$*" -%)%1>


25/30

TVS Motors

F*6*/20 =B00& 9!QC .%: 1*%?`a 1*%? b̀ 1*%?W` 1*%?WW

+/%., 9%I$)%1 JM JM JM MB

;,


26/30

Companies - Summary

F*^*^ ,-&$ M0%$ 1$&$.$%# AP= 1$&$%+

3#0%*&4/5 K0E0%*50NHW` JDa 6Da 6D=

NHWW 6DC ?CDJ 6DK

C3.7NHW` KMDR8 RKD=8 BDR8

NHWW a6DK8 KCDR8 6RDK8

C3,NHW` MMDJ8 KCDJ8 MDa8

NHWW RCD78 MBD78 6CDR8

;4E4U0/U )*T$-&NHW` 7MDC8 aBDM8 7JDM8


+*(.-,i _1**2A,.3N '9QN '11,3.* 9%1-(1%)$*"<

D D D

.*+B .$/E0%+4$/ .T2609;*T+:

NHW` ?JK ?6= ?6K

NHWW ?7J ?6R ?6M

P*6-*&4$/+

.-%%0/& )%420 6RJ7 JC=a =B

A*%50& )%420 6R=M JCRR R7

G#+4U0 J8 a8 JK8

NHW]7 7P@7F!A;, 66DB 67D= RD7

NHW]7 )@7 6MDB 6RDa aDJ


27/30

A endix



28/30

Hero Honda JV Split – Analysis

M0%$ 1$&$ .$%#

)%$"$&0% O%$-# 9dWe: )->642 @ !/+&4&-&4$/+

9Ybe:

M0%$ !/E0+&"0/&+ ) K&U9YYe:

F*B*U-% .B*/U!/E0+&"0/&+ ) K&U

9Ze:

F1 1-/^*6 V N*"46T O!. V F*4/

M0%$ M$/U* 1$&$%+

)%$"$&0% O%$-# 9dWe: )->642 @ !/+&4&-&4$/+

9Ybe:

M0%$ !/E0+&"0/&+ ) K&U9Wae:

F*B*U-% .B*/U!/E0+&"0/&+ ) K&U

9Ze:

F1 1-/ *6 V N*"46

M$/U* 1$&$%2T260+9\ce:

&3.)' S$+0?/@ ;.##')/ Q ;)' &E+?# &3.)' S$+0?/@ ;.##')/ Q ;$-# &E+?#


9Zè: 9]è:9W`è:

;0*6 N0*&-%0+J

• T,.* :.*(I %3.,,# )* A(> *() T*"#% ]*)*.p<


29/30

>

3?

3>

@?

@>

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

QbW &",0 c3d =3d

>

3?

3>

@?

@>

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

QbW &",0 c3d =3d

>

3?

3>

@?

@>

(?

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

QbW &",0 c3d =3d

Price / Earnings Charts

S')$ 4$#$K$)E F.a.a !"#$ ??

3???

3>??

@???

@>??

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

Q#SV" 33X 34X 3BX 3CX @3X

?

>??

3???

3>??

@???

@>??

(???

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

Q#SV"


30/30

Premium vs. Market Leader & EV / EBITDA

S')$ 4$#$K$)E F.a.a !"#$ ?*

?*

>?*

3??*

3>?*

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

Q#"9bES2V &",0 c3d =3d

=B?*

=4?*

=@?*

?*

@?*

4?*

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

Q#"9bES2V &",0 c3d =3d

=B?*

=4?*

=@?*

?*

@?*

4?*

B?*

C?*

3??*

3@?*

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

Q#"9bES2V &",0 c3d =3d

9>"(&B W%". D.1.@."0 ()+ Q%%*


>

3?

3>

@?

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=3

W6bW+K5E. &",0 c3d =3d

?

>

3?

3>

@?

@>

&,T=?C L$]=?C &,T=?) L$]=?) &,T=3? L$]=3? &,T=33 L$]=33

W6bW+K5E. &",0 c3d =3d

>

3?

3>

@?

@>

(?

f /G= ?C f ,0= ?) f /G =?) f ,0= 3? f /G= 3? f ,0 =33 f /G= 33

W6bW+K5E. &",0 c3d =3d

'./0)"%6 )-)#*+1 1(% RMN KA1.

;*6%a

Download - India TwoWheelers Dec2011

Top Related