Maruti, Hyundai post highest-ever monthly sales in February

NEW DELHI: India's largest car maker Maruti Suzuki India on Tuesday reported its highest-ever monthly sales of 96,650 units for February, a jump of 22.05 per cent over the same month last year. Sales of Hyundai Motor India Ltd, the country’s second largest car manufacturer touched a new high with record sales of 31,001 units in the domestic market registering 46.1% growth over the same month last year.

In the domestic market, Maruti sold 84,765 units from 70,625 units in February 2009, an increase of 20.02 per cent. Exports surged by 38.76 per cent to 11,885 units from 8,565 units in the year-ago period, it added. Maruti had sold 79,190 units during the same month last year. "This is the highest-ever total monthly sales in the company's history," Maruti Suzuki India (MSI) said in a statement. The previous monthly sales record stood at 95,649 units in January 2010, it added.

HMIL's total sales for February, 2010 stood at 54,617 units as against 38,235 units in February, 2009 registering 42.8% cumulative growth. The domestic sales growth accounted for 31,001 units (which is the highest since 1998 when HMIL launched the Santro in September) as against 21,215 units in February, 2009 while the exports grew from 17,020 units in February, 2009 to 23,616 units in February, 2010 reflecting 38.8% growth YOY.

However, sales of Maruti's once bread-and-butter model M800 fell by 22.01 per cent at 3,178 units compared to 4,075 units in February 2009, the statement said. The A2 segment (comprising Alto, WagonR, Estilo, Swift, A-Star and Ritz) witnessed 19.97 per cent growth at 60,380 units compared to 50,331 units in the same month a year ago.

A3 segment sales (consisting of SX4 and DZiRE) increased by 27.49 per cent to 10,254 units compared to 8,043 units in the corresponding period a year ago, the company said.

MSI's passenger car sales rose 20.53 per cent at 84,480 units in February against 70,090 units in the same month in 2009, it added.

The segment-wise cumulative sales of Hyundai for the month of February, 2010 are as follows: A2 Segment (Santro, i10, Getz & i20) 50,515 units; A3 Segment (Accent & Verna) 4,051 units; A5 Segment (Sonata Transform) 50 units; and SUV Segment (Tucson) 1 unit.

Budget 2010: FM delivers a masterful performance on all fronts

First Sachin Tendulkar, and now, the finance minister; this seems to be a week for veterans to dazzle us with their deft footwork.

The FM must have had an unenviable task in front of him, at the time of drafting the budget proposals. He had to consolidate the growth momentum, rein in the fiscal deficit, improve the climate for investment and spending, and to do all this while keeping a keen eye on inflationary pressures. It’s been a virtuoso performance on all these fronts.

The broad numbers look very positive on the macro-economic front — a fiscal deficit of about 5.5% and targeted deficits of 4.8% in 2011-12 and 4.1% in 2012-13 are extremely positive signs. That he has managed to limit government borrowings to Rs 3.45-lakh crore is also positive.

The market was expecting this to be somewhere around Rs 4-lakh crore. The reduced number leaves enough headroom for private sector borrowing. An increase in 15% of plan expenditure while non-plan expenditure has grown by only 6% is another positive.

FM’s decision to include hidden deficit-spending like oil bonds and fertiliser bonds in the fiscal deficit accounting is the right move and will bring in greater transparency. Another move towards greater transparency is his promise to release a status paper on public debt in six months.

Some of his policy moves are long overdue and most welcome. These include the promise of a comprehensive FDI regulation, an apex level Financial Stability Council, Financial Sector Legislative Reforms Commission, especially the latter. I also hope that he is able to implement his promises to adopt the Kirit Parikh Committee report on decontrol of oil sector pricing and allowing of FDI in the retail sector, especially in the retailing of food and farm items.

FM’s announcement of additional banking licences, including for those NBFCs complying with various norms and his promise of extending banking services to clusters habitation of 2,000 people using the banking correspondent route, will go a long way towards financial inclusion and expanding the reach of banking services. His provision of Rs 16,500 crore towards recapitilisation of PSU banks is also welcome, especially for some of the weaker PSU banks.

The finance minister has targeted Rs 25,000 crore through disinvestment and has promised to raise more through the same route next year. This will add further depth to the market, though I hope that these are spread out and priced correctly to attract retail investors.

The FM has increased the allocation to the infrastructure sector by a whopping 46%. He has allowed an investment of Rs 20,000 in designated infrastructure bonds to be deducted from taxable income. This will also help divert household savings in the infrastructure sector. Given the state of India’s infrastructure and the enormous investments required, both these are positive moves.

Another positive move, which will remove several procedural anomalies, is the establishment of a Coal Regulatory Authority and the decision to allocate captive coal blocks for power plants by a system of competitive bidding. This will raise additional resources as well for the government.

By broadbasing the direct tax slabs and by removing the surcharge from corporate income tax, the FM has left more money in the hands of both the household as well as the corporate sector. This will lead to enhanced spending and investment and can only add to the growth story.

The rollback of excise duties was expected and while it might will raise fuel prices as well as hit some sectors like auto, cement etc, given the fact that food prices have been falling for the past couple of months and crude prices are also softer in the international market, this is unlikely to have too much of an impact on inflation.

Overall, I believe this is an extremely positive and balanced budget that will help propel India into the next growth orbit. I expect, with this budget, GDP will grow by about 7.7% to 8%.

Brokerages turn positive on Tata Motors

MUMBAI: Shares of automobile manufacturer Tata Motors zoomed Tuesday after after Jaguar Land Rover boosted its December quarter profit and the top vehicle maker reported robust sales for February. Brokerage firms lauded the automaker’s stellar performance, thus maintaining a ‘Buy’ rating on the stock.

“We believe that stock is currently undervalued given the recovery of JLR’s profitability. Key growth triggers for Tata Motors going ahead are 1) domestic CV volumes growth (higher allocation to road development in budget), 2) stabilization of JLR profitability (OPM) at 7.5 per cent and 8 per cent for FY11E and FY12E respectively, 3) margin expansion in domestic business and 4) decrease in leverage to strengthen balance sheet position.

Future concerns for Tata Motors include competition and impact on demand due to rise in excise duty. We upgrade the stock to buy from market price with a revised target of Rs 836,” said India Infoline.

Nirmal Bang Securities has recommended investors to buy shares of Tata Motors with a stop loss of Rs 701. “The structure looks positive and this stock has given a fresh breakout with good volumes. If this stock manages above 735, then next level could be 800-810,” said the brokerage firm.

Anand Rathi Securities has retain its Buy rating on the stock and also raised its estimates and target price to Rs 923 to factor in a faster than expected turnaround at JLR.

“The outlook for the CV sector is buoyant due to the recovery in economic growth, emission-norm change, good bus demand, and infrastructure development activity. JLR had an EBITDA margin of 9.8% (vs 2.9% in 2Q). Margin improvement is attributable to an improved product mix, lower qoq marketing costs, and cost control measures (which could yield benefits in future as well),” said the brokerage firm.

“Our target price of Rs923 is based on standalone value of Rs572 (6.3x FY11e EV/E, 15% discount to its 5-year average), investments in key subsidiaries at Rs165, and JLR at Rs186. Buy,” it added.

Meanwhile, IFCI Financial Services has maintained a neutral rating on the stock. “At CMP of Rs 711 the stock trades at 19.5x FY10E and 15.7x FY11 EPS. We maintain our Neutral rating on the stock with an upward revised standalone target price of Rs 634 based on 14x FY11E standalone EPS,” it said.

Shares of the company were trading at Rs 777.65, higher by 9.34 per cent or Rs 66.45 on the NSE. The stock touched a high of Rs 781 in trade so far.

Tata Motors reported a 58-per cent jump in February sales at 69,427 units, against 43,811 units sold in the same month last year. The company's passenger vehicle sales in the domestic market grew 43.7 per cent at 29,241 units in the reporting month against 20,348 units in the same period last year, its highest ever sale, Tata Motors said in statement. Its total exports jumped over twofold at 3,237 units compared to 1,318 units in the same month last year, it added.

The company also reported a consolidated net profit of Rs 650 crore for the December quarter of 2009, after suffering a loss of Rs 2600 crore last year. The profit was boosted by rise in sales and margins at its Jaguar Land Rover unit in London as buyers returned after the global crisis.