Auto Industry

Automobile Industry

Domestic Sales: 17.3 million units

Exports: 2.9 million units

Market Size: Rs.3 Lakh Crores in FY12

Volume Growth: 14% FY11-FY12

Industry Median EV/EBITDA: 8.1x

Industry Median EV/Sales: 1.0x

Autocomponent Industry

Market Size: Rs.2.2 Lakh Crores in FY12

Market Growth Rate: 9% FY11-FY12

Flate Growth Expected Current Fiscal

Industry Median EV/EBITDA: 3.6x

Industry Median EV/Sales: 0.4x

Indian Automobile Industry 2013

Automobile industry facing a tough time as vehicle demand is sluggish. Valuations of companies on the lower end. Autocomponent industry is also expected to witness a flat growth this fiscal because of weak automobile demand. The industry will remain under pressure in the near future because of the high inventory levels with dealers.

As per estimates from Society of Indian Automobile Manufacturers (SIAM), the Indian Automobile Industry’s volume grew by 14% over FY11-FY12. The gross turnover is expected to be around Rs.3 lakh crores in FY12.

Valuation of Automobile Companies

Segment

FY12 Sales (Units)

Listed Companies

EV/EBITDA (ttm)

EV/Sales (ttm)

Commercial Vehicles

                    902,195

Tata Motors

5.5x

0.7x

Mahindra & Mahindra

7.3x

0.9x

Passenger Vehicles

                 3,125,390

Maruti Suzuki India

14.1x

1.1x

Hindustan Motors

NA

0.3x

Motorcycles

               11,945,344

Hero MotoCorp

9.7x

1.5x

Bajaj Auto

13.7x

2.9x

TVS Motor Company

4.0x

0.2x

Scooters

                 3,525,633

LML

8.2x

0.1x

Three Wheelers

                    876,127

Scooters India

NA

0.5x

Source: Capital IQ; Company Reports; SIAM; SMERGERS Research

Indian Auto Component Industry 2013

As per estimates from Automotive Component Manufacturers Association (ACMA) of India, the Indian Auto component industry grew at 9% over the last year to reach Rs.2.2 lakh crores in FY12. But the industry is expected to witness a flat growth in this fiscal because of weak automobile demand.

Auto Component Industry Segments

FY12 Share

Engine Parts

31%

Drive Transmission & Steering Parts

19%

Body & Chassis

12%

Suspension & Breaking Parts

12%

Equipment

10%

Electrical Parts

9%

Others

7%

Source: ACMA

Valuation of Auto component companies

Top Listed Companies

EV/EBITDA (ttm)

EV/Sales (ttm)

Motherson Sumi Systems

13.4x

1.0x

Sundaram-Clayton

2.2x

0.2x

Bosch

18.6x

3.6x

Tube Investments of India

7.9x

2.2x

Bharat Forge

5.4x

0.9x

Amtek Auto

5.7x

1.5x

Exide Industries

14.9x

2.1x

Industry Median

3.6x

0.4x

Industry median includes Sundram Fasteners, Mahindra Forgings, Wheels India, Rane Holdings, Asahi India Glass, Amtek India, Sunflag Iron And Steel Company, Munjal Showa, Rico Auto Industries, Dynamatic Technologies, Sona Koyo Steering Systems, Omax Autos, Minda Industries, Subros, Jamna Auto Industries, Gabriel India, Federal-Mogul Goetze, Pricol, Jay Bharat Maruti, Wabco India, Denso India, Banco Products, Lumax Industries, JBM Auto, Steel Strips Wheels, Automotive Axles, Lumax Auto Technologies, Autoline Industries, Ucal Fuel Systems, Munjal Auto Industries, Rane, Hinduja Foundries, Automotive Stampings & Assemblies, Harita Seating Systems, Fiem Industries, Hi-Tech Gears, Alicon Castalloy, Jay Ushin, Bharat Seats, Bharat Gears, Suprajit Engineering, Setco Automotive, Talbros Automotive Components, JMT Auto, Shivam Autotech, Rane Brake, ZF Steering Gear, Rane Engine Valve, Kalyani Forge, Enkei Wheels, India Nippon Electricals, Sundaram Brake, Fairfield Atlas, Clutch Auto, Rasandik Engineering Industries India, Samkrg Pistons and Rings, Precision Pipes and Profiles Co., ANG Industries, Menon Pistons, Machino Plastics, Triton Valves, GS Auto International, Autolite India, Kar Mobiles, Remsons Industries, Lumax Automotive Systems, Saint-Gobain Sekurit India, Raunaq Automotive Components, Menon Bearings, Porwal Auto Components, Kinetic Engineering, Hindustan Composites, IP Rings, Investment & Precision Castings, AUNDE India, Hella India, Schrader Duncan, Hindustan Hardy Spicer, IST, Kew Industries, Coventry Coil-o-Matic Haryana, BCL Forgings, Gujarat Automotive Gears, Jagan, Sibar Auto Parts

End Notes

Source: Analyst Reports, Company Press Releases, Yahoo Finance

FY: Financial Year ending March

All multiples are as on Dec 31st 2012

Conversion Rate: 1 USD = 50 INR

ttm: trailing twelve months, or last twelve months

EBITDA: Earnings Before Interest, Taxes, Depreciation & Amortization - a measure of company’s profitability

EV: Enterprise Value - a measure of company’s worth