Automobiles Sector Check - Prefer Commercial Vehicle OEMs Over Passenger Vehicles: Systematix


BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Systematix Research Report

We expect original equipment manufacturers to benefit from falling commodity prices, as their gross margins expand 250-350 basis points in H2 FY23E on 20-25% decline in key commodity prices (steel, aluminum and copper).

But, increasing competitive intensity in the passenger vehicle segment should cause marketing expenses and discounts to inch up 100-150 basis points, after a sharp cut in last two years.

Operating leverage benefits too could be limited due to sharp inflation in employee costs and other expenses, thereby limiting Ebitda margin expansion over the forecast period.

On the contrary, we see positive benefits on net pricing of commercial vehicles, backed by broad-based volume growth, post the sharp downturn.

Click on the attachment to read the full report:


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.


Image and article originally from Read the original article here.