Fw: IRFC Tax Free Bonds: Opening on 21 Jan 2013

 

Issue Period: 21 Jan 2013 to 29 Jan 2013 Key Benefits: Indian Railway Finance Corporation Ltd is fully owned by the government of India Credit Ratings: AAA/Stable by CRISIL, AAA by ICRA and CARE Interest on these Bonds is Tax-Free, no TDS is applicable, Wealth Tax is not levied No lock in period and no upper limit on investment amount Issue Size: Rs 1,000 Crores with an option to retain oversubscription upto Rs 8,886.40 Crores Additional Coupon Rate of 0.50% p.a. for Category IV Applicants Eligible NRIs can invest in Category III or IV Issue Structure: Issue of Tax Free Secured Redeemable Non Convertible Bonds Options / Series of Bonds Series 1 Series 2 Tenor 10 years 15 years Coupon Rate % p.a. (Category I, II and III) 7.18 7.34 Additional Coupon Rate % p.a. (Category IV) 0.50 0.50 Total Coupon Rate % p.a. (Category IV) 7.68 7.84 Frequency of Interest payment Will be paid on 15 Oct every year Face Value / Issue Price per Bond Rs 1,000 Minimum Application Rs 5,000 (in multiples of Rs 1,000 thereafter) Issuance Physical and Demat mode Interest on application % p.a. As per coupon rate applicable to investor category Interest on refund % p.a. 5.0 Proposed to be listed on Proposed to be listed on BSE and NSE Basis of Allotment : On first come first serve basis Investor Category I - Institutional II - Non Institutional III - HNI (more than 10 lacs) IV - Retail (upto and including 10 lacs) Issue allocation 20% 20% 20% 40% When Bonds held by the original allottees of Category IV are sold / transferred, coupon rate will be revised to the coupon rate for Category I, II & III investors. Refer to details. * For the purpose of information only, invest only after referring to the final prospectus.

Disclaimer: Registered Office: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai - 400 042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos. BSE Cash-INB011073351; F&O-INF011073351; NSE - INB/INF231073330; DP: NSDL-IN-DP-NSDL-233-2003; CDSL-IN-DP-CDSL-271-2004; Mutual Fund: ARN 20669; For any complaints email at igc@sharekhan.com; Disclaimer: Client should read the Risk Disclosure Document issued by SEBI, relevant exchanges and the T & C on www.sharekhan.com before investing.Sharekhan Disclaimer: Sharekhan Limited is engaged as a distributor of IPO/Bonds/NCD. Sharekhan or any of its group concerns do not in any manner recommends any product or any of its characteristics. The client is advised to take his / her own independent decisions for investing in any financial product after understanding their respective nature and risk and returns involved. The client may also approach his / her own consultants for investing in financial products or in relation to the tax related aspects. We do not solicit any action based upon this promotional material. Please note that the product does not take into account any particular investment objectives, financial decisions or needs of individual recipients. Neither Sharekhan nor any person connected with Sharekhan accepts any liability arising out of investment suggested in the material above.

Fw: Company Report - VA Tech Wabag - Secular play - BUY

 

Company Report - VA Tech Wabag: Secular play - BUY CMP Rs560, Target Rs735, Upside 31.2% Investment into water management technology is the need of the hour. Globally, water is scarce and rising demand fueled by growing population and higher urbanization will make it even scarcer. The situation is aggravated with unequal distribution of water resources; India constitutes 17% of world population and a mere 4% of the total water resources. VA Tech Wabag (VA Tech), the largest player in water management space in India, could be a key beneficiary of any jump in investment in this segment. We believe VA Tech's leadership in the domestic market is backed by three vital factors: 1) its ability to provide comprehensive range of services across the life cycle of project, 2) use of advance technology, through its R&D centres and patents which it owns, (differentiates the company as water management projects are technically complex) and 3) strong execution track and brand recognition with established relationships with key clients. Healthy order book at Rs42bn (2.9x FY12 revenues) provides strong revenue growth visibility. Diversification of its order book, both on geographical and segmental basis, aids in reduction of the dependency risk. Further, increase in share of O&M orders provides steady cash flow visibility. We expect robust order book for the company to translate into 16% revenue CAGR over FY12-15E. OPM is expected to expand by 120bps over FY12-15E led by higher contribution from high margin O&M segment and cost reduction in global operations. The company has a strong balance sheet with a large cash balance of Rs2.9bn (~20% of market cap) and strategy of staying asset light has resulted into healthy return ratios (avg. ROIC of 46% over FY09-12). VA Tech plans to use the cash for an acquisition, which could be a key trigger for the stock in the medium term. Premium valuations for VA Tech against infra companies, we believe, is justified considering secular growth potential and sound fundamentals of the company. We assign a P/E of 14x to FY15E EPS to arrive at a 9-12-month target price of Rs735. Initiate with BUY.

Click here for the detailed report on the same.

Warm Regards, Amar Ambani

Fw: Investor's Eye: Update - Bajaj Auto (Q3FY2013 results-First cut analysis), Yes Bank (Price target revised to Rs600)

 

 

Investor's Eye [January 16, 2013]  Sharekhan www.sharekhan.com

Summary of Contents     STOCK UPDATE Bajaj Auto  Recommendation: Hold Price target: Under review Current market price: Rs2,073 Q3FY2013 results-First cut analysis Result highlights  Bajaj Auto's Q3FY2013 PAT broadly in line with estimate The Q3FY2013 performance of Bajaj Auto Ltd (BAL) was broadly in line with expectations. Though weak realisation in the domestic market pushed down the operating profit margin (OPM) but the same was compensated by a lower other expenditure. The OPM at 18.7% was marginally better than estimated. A higher other income fuelled the profitability and consequently the adjusted profit after tax (PAT) at Rs818.7 crore was better than our estimate of Rs800 crore. Positive surprises The other expenditure/sales ratio dropped to 6.2%, the lowest in four quarters. The other expenses grew 5.5% year on year (YoY), at a lower pace than revenues, which grew at 8.6% YoY. The company realised the benefits of operating leverage due to improved volumes during the quarter. The other income at Rs203.2 crore was better than our estimate of Rs180 crore. The company realised a higher investment income of Rs109.5 crore during the quarter.  Negative surprises The realisation growth of 1.3% quarter on quarter (QoQ) to Rs47,996 per vehicle was below our estimate of Rs48,576 per vehicle. Though the export realisation has been robust, but the domestic realisation is under pressure due to subdued demand.  On the back of the lower realisation, the contribution per vehicle came in at Rs13,227, about 2.9% below estimate. The contribution declined by Rs153 per vehicle sequentially. The tax rate at 30.2% was higher than estimated due to increased production from Pantnagar where the tax benefits have expired.  Company guides to flat volumes for FY2013 After the end of the festive season, the company expects the volumes to remain subdued in Q4FY2013. It has guided to a flat growth in FY2013, ending up with volumes of 4.3 million units. Though the company is witnessing a recovery in exports, but the domestic market is likely to remain subdued.  New product launches to maintain outperformance BAL has hinted that the new product launches would enable it to gain market share in the domestic motorcycle segment. With an encouraging response to Discover ST and Pulsar NS the company has outpaced the industry. Further, with the recent launch of Discover 100T, the company expects the trend to continue. Valuation  We have factored volumes of 4.3 million units for FY2013, representing a flat growth, which is already in line with the management's guidance. Given that the results are in line with expectations, we keep our estimates and Hold recommendation on BAL unchanged as of now. We will review our estimates after a conference call with the management tomorrow.      Yes Bank Recommendation: Buy Price target: Rs600 Current market price: Rs518 Price target revised to Rs600 Result highlights  Yes Bank's Q3FY2013 results were slightly above of our estimate as the net earnings grew by 34.7% year on year (YoY; 11.8% sequentially). The growth in profit was driven by a robust growth in the non-interest income and net interest income (NII).  The NII growth was largely in line with our estimate as it grew by 36.7% YoY (11.5% quarter on quarter [QoQ]) led by a strong growth in the customer assets and a sequential improvement in the net interest margin (NIM). The NIM surged by 10 basis points to 3.0% while the current account and savings account (CASA) ratio expanded by 106 basis points to 18.3% from 17.3% in Q2FY2013.  The growth in advances including credit substitutes was 27.4% YoY (excluding credit substitutes, the growth was 22.3% YoY). The corporate advances grew by 27.1% YoY whereas the growth in retail advances slowed to 8.6% YoY. The deposits grew by 20.2% YoY on account of a robust growth in the CASA deposits.  The non-interest income showed a strong growth of 48.1% YoY (up 13.2% QoQ) aided by a robust 101% year-on-year (Y-o-Y) growth in the financial advisory and 66% Y-o-Y growth in retail fees. The cost/income ratio declined to 37.2% from 39.5% in Q2FY2013. The asset quality improved on a quarter-on-quarter (QoQ) basis as the gross and net non-performing assets (NPAs) declined to 0.17% and 0.04% respectively (among the best in the industry). Moreover, there was no fresh restructuring in Q2FY2013 and the restructured advances book was 0.43% of advances. Outlook and valuation During Q3FY2013, Yes Bank delivered another strong set of numbers with improvement across all parameters. The initiatives taken by the management to enhance the retail and CASA deposits are yielding and are clearly increasing the cushion on margin. Therefore, considering the strong growth, scope for margin expansion and equity dilution, we revise our price target upwards to Rs600 (2.4x average of FY2014 E book value [BV] and FY2015E BV) and maintain Buy rating on the stock.   Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

Fw: Investor's Eye: Q3FY2013 earnings preview

 

Investor's Eye [January 09, 2013]  Sharekhan www.sharekhan.com

Summary of Contents     SHAREKHAN SPECIAL Q3FY2013 earnings preview  Revenue growth momentum eases further but so does pressure on margins  Key points Revenue growth to slip further: For Q3FY2013, the Sensex companies are expected to show an aggregate revenue growth of 10.4% year on year (YoY; 11% YoY ex oil companies), which is the slowest growth in 12 quarters. The growth in aggregate revenues would be led by the pharmaceutical (pharma; up 20.5%), automobile (auto; up 16 %) and fast moving consumer goods (FMCG, up 13.3%) sectors. However, the slowdown in revenue traction continues in the capital goods and energy sectors as well as in some biggies like Reliance Industries Ltd (RIL).  Margin pressure easing off: Amid a slowing revenue growth, the stablisation of the operating profit margin (OPM; EBITDA margin) is emerging as a comforting factor. On an aggregate basis, the OPM of the Sensex companies is expected to be 18.2 % (vs 18% in Q2FY2013), which is slightly higher on a sequential basis. This could be attributed to a higher OPM driven by a better volume offtake in the festive season. Thus, the festive demand-driven sectors like FMCG and auto would see some margin improvement sequentially.  Subdued earnings growth; consensus expectation indicates pick-up in earnings growth on the back of cyclical recovery in economy: On an aggregate basis, the Sensex companies' earnings are expected to grow by 8% YoY in Q3FY2013. However, excluding the oil companies the earnings growth is likely to be around 8.6%. Moreover, the breadth of the earnings is expected to improve as around 21 companies (out of 30-company index) are expected to post a growth in the earnings YoY.  After a long period of downgrades in the consensus earnings estimates, there hasn't been any downgrade in the aggregate earnings of the Sensex companies over the past few months. This is seen as an early sign of a potential reversal of the trend. The trend reversal could be backed by a revival in corporate earnings growth on the back of a cyclical upturn in the economy. The consensus estimates are factoring an earnings growth of 14% for FY2014 (much above 7-8% for this fiscal). Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.   .

Fw: Attractive FD schemes from quality manufacturing Companies

 

Dear Investors,

 

Greetings from Integrated.

 

Presenting you with attractive FD schemes from quality manufacturing companies.

1.  Bilcare Limited

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Worlds largest pharmaceutical packaging company with presence in more than 20 countries. PAT for 2011/12 of Rs.75 Crs & Dividend of 20%. Rs.10/- shares quoting at around Rs.230/- in BSE currently. 12% interest for 3 year Deposits / 0.25% additional for Senior Citizens.

2.  Elder Pharmaceuticals Limited

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One among the largest pharmaceuticals company commenced operations in 1989. "Shelcal" - Elder's main brand is one of the top brands in Indian Pharmaceutical Industry. PAT for 2011/12 of Rs.84 Crs & Dividend of 30%. Rs.10/- shares quoting at around Rs.400/- in NSE & BSE currently. 11.50% interest for 3 year Deposits / 0.50% additional for Senior Citizens.

3.  Jyoti Structures Limited  

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Manufacturers of Transmission Line towers & undertakes EPC contracts in power transmission. PAT for 2011/12 of Rs.85.54 Crs & Dividend of 55%. Rs.2/- Shares are currently quoting around Rs.46/- in NSE & BSE currently. 12.50% interest for 3 year Deposits.

4.  Thirumalai Chemicals Limited  

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Track record of more than 40 years in manufacturing & sale of various chemical products. "ISO 9001" & "ISO 14001" certified. PAT for 2011/12 of Rs.4.78 Crs. Half yearly PAT of Rs.25 Crs. for the period ending September 2012. Rs.10/-Shares are currently quoting around Rs.120/- in NSE & BSE currently. 11% interest for 2 year Deposits.

For further informations and application forms, kindly contact your nearest branch of Integrated.

For list of branches, please visit www.integratedindia.in

Regards,
Integrated Enterprises (India) Ltd., 

  

Fw: Investor's Eye: Update - Marico, Telecommunications; Special - Q3FY2013 Auto earnings preview

 

 

Investor's Eye [January 08, 2013]  Sharekhan www.sharekhan.com

Summary of Contents     STOCK UPDATE Marico Recommendation: Hold Price target: Under review Current market price: Rs231 Kaya's demerger-a right step at a right time Key points Event: Marico restructuring its businesses into two separate entities The board of Marico passed a resolution approving restructuring of Marico's businesses into two separate entities, Marico Kaya Enterprises (MaKE; will house Kaya's skin care solution business) and Marico (will include Marico's existing domestic consumer business and international consumer business), effective from April 1, 2013. The demerger of Kaya was largely to enhance the value of the skin care solution business through a separate entity having different entrepreneurial talent. On the other hand, the restructuring of businesses is positive for Marico's consolidated business, as it will improve its margin profile and will result in improving the return ratios (as Kaya was a capital intensive business). There won't be any one-time expenses charge to the income statement of Marico or Kaya on account of the proposed demerger. The cost of restructuring would be about Rs2.5 crore, which will get adjusted against the share premium account in the balance sheet of Marico. The demerged entity MaKE will be separately listed on the bourses and will have a shareholding pattern similar to that of Marico (~60% promoters and 40% others). One equity share of Rs10 each of MaKE will be allotted at a premium of Rs200 per share for every 50 shares of Marico (indicating equity value of MaKE at ~Rs270 crore).  Mr Saugata Gupta, current CEO of the domestic consumer business, would head Marico's fast moving consumer goods (FMCG) business, while Mr Vijay Subramanian (currently heads international business) will head MaKE.  Outlook and valuation: The demerger of Kaya into a separate entity is positive for Marico as it would result in improving the margin profile and reducing the interest cost in the coming years. This will lead to earning accretion for Marico in FY2014. Marico could focus on improving the growth prospects of its consumer business in the long run. Kaya's business was considered as a drag on Marico's earnings and the demerger would result in re-rating of Marico's stock price. On the other hand, MaKE might look at roping in a strategic partner to improve its growth prospects in the long run. At the current market price, the stock trades at 28.3x its FY2014E earnings per share (EPS) of Rs8.2 and 24.5x its FY2015E EPS of Rs9.4. We will review the earnings estimate and the price target after the announcement of the Q3FY2013 results. Thus, we maintain our Hold recommendation on the stock with the price target under review. SECTOR UPDATE Telecommunications Subscriber base falls sharply-a reflection of rationalising competitive intensity After a marginal increase to the tune of 0.88 million in the subscriber base of the telecommunications (telecom) companies in October 2012, the GSM operators collectively shed over 9 million subscribers in November 2012. In the last five months, GSM subscriber base has declined by around 15.3 million, with the operators withdrawing the discount offers and increasing the cleaning exercise of the non-active subscribers (inactive for more than 90 days).  In November 2012, all the operators reported a dismal performance. At an all-India level, the GSM operators reported a negative net subscriber addition of 9.02 million users compared with a gain of 0.88 million users in October 2012. The total GSM subscriber base as of November 2012 stood at 663.78 million users, down 1.34% on a month-on-month (M-o-M) basis. Among the top three GSM operators, Bharti Airtel led the fall in the GSM subscriber base, shedding almost 2.8 million subscribers in comparison with a gain of 0.49 million subscribers in October 2012. Bharti Airtel's subscriber base as of November 2012 stood at 183.61 million subscribers, down 1.5% on an M-o-M basis. The company's subscriber market share for the month stood at 27.66% as against 27.71% in October 2012. Vodafone India and Idea Cellular also reported a decline in their subscriber market share during the month. Vodafone India and Idea Cellular lost 2.38 million subscribers and 1.56 million subscribers respectively during the month. Highlights of the month The month again witnessed a decline in subscriber base. The subscriber base has now fallen in three out of the last four months.  Factors such as rationalisation of subscriber acquisition costs in the form of cutting of dealer commissions, disconnecting inactive users, tariff increases and withdrawal of bonus offers are definitely having an impact.  After witnessing the trend of the last few months, we believe that the growth in subscriber additions has slowed down and will continue to do so as telecom companies focus on improving the quality of their revenues, instead of increasing their subscriber base through tariff wars to improve their margins. The three major operators, Bharti Airtel, Vodafone India and Idea Cellular collectively lost more than 6.7 million subscribers (74.7% of the total) in November 2012. The subscriber base in the coming months should fall as well as the operators withdraw from the circles in which they had failed to retain spectrum in the November 2012 auctions. We expect the incumbent operators, Bharti Airtel, Vodafone India and Idea Cellular, to benefit from the same. In November 2012, circle A lost the maximum number of subscribers, shedding approximately 4.2 million subscribers, with Tamil Nadu accounting for a major chunk of the same. Valuation: The dwindling subscriber numbers in the recent months is a reflection of the declining competitive intensity in the telecom sector as operators are withdrawing discounts/freebies and intensifying the cleaning exercise of the non-active subscribers.  Going forward, we would probably witness a more muted subscriber addition, at least for the next couple of months. We are not duly worried about the negative subscriber addition in the recent months as it will gradually weed out the non-active subscribers and also improve the revenue per minute (RPM) and average revenue per user (ARPU) which will positively affect the margins.  On the regulatory front, after the failure of the 2G spectrum auctions, the price target for circles that received no bids (Mumbai, Delhi, Karnataka and Rajasthan) war slashed by 30%. The new auctions are scheduled to take place in March 2013. The auction of 900-MHz spectrum for Mumbai, Delhi and Kolkata will also take place simultaneously. We expect these auctions to have a much more rational pricing environment, even though the reserve price for the 900-MHz spectrum remains on the higher side. Overall, the leaders like Bharti Airtel have a definite advantage in comparison with the newer players. Given the signs of easing of the competitive intensity and the belief that the telecom sector is headed for a better future, we retain our positive stance on Bharti Airtel.   SHAREKHAN SPECIAL Q3FY2013 Auto earnings preview   Drive with caution Festive season marks earnings recovery The festive season (spread over October 2012 and November 2012) marked earnings recovery for the automobile (auto) sector in Q3FY2013. The Sharekhan auto universe (excluding Tata Motors) is expected to report a 15.5% growth in the quarter's earnings. Barring for few companies like Ashok Leyland, Bharat Forge and FAG Bearings India (FAG), most auto companies are expected to show a healthy growth year on year (YoY). Maruti and M&M to outperform in the OEM segment, Apollo Tyres and Exide to lead ancillaries  The auto original equipment manufacturers (OEMs) are expected to report a 6.6% decline in their profitability. Maruti Suzuki (Maruti) and Mahindra and Mahindra (M&M) are expected to outpace OEMs with a growth of 131% and 27% respectively. Apollo Tyres is expected to emerge as a top performer in the ancilliaries followed by Exide Industries (Exide). Amongst the OEMs, Ashok Leyland would disappoint by posting a loss. Bharat Forge is expected to disappoint the most among the ancillaries. Q4FY2013 sales likely to remain subdued, expect gradual recovery in FY2014 After the end of the festive season, December 2012 saw sales declining for most companies. Automotive sales are likely to remain subdued in Q4FY2013. With an improving macro-economic outlook and softening of interest rates, we expect a gradual recovery in the volumes in FY2014. In a structural upturn, companies that hold on to their market share or are expected to gain back the lost ground would gain the most. We expect Maruti and M&M to outperform among the OEMs. Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

Fw: Investor's Eye: Stock Idea - Capital First (Leveraging on its new-found pedigree); Update - Automobiles (In reverse gear)

 

 

Investor's Eye [January 02, 2013]  Sharekhan www.sharekhan.com

Summary of Contents     STOCK IDEA Capital First Recommendation: Buy Price target: Rs260 Current market price: Rs190 Leveraging on its new-found pedigree Key points  A new beginning: Capital First, the erstwhile Future Capital Holdings, has been acquired by the leading global private equity player, Warburg Pincus, from Pantaloon Retail India (in line with the Future group's strategy to exit its non-core businesses and deleverage the balance sheet of Pantaloon Retail India). As part of the transaction, Capital First's balance sheet has been cleaned up considerably with the assignment of some sticky advances (like the exposure to the Deccan Chronicle group) and the infusion of additional capital of Rs100 crore by Warburg Pincus. The accounting policies are being revised to make them more conservative and reflective of the company's actual performance.  Shifting gears-moving on to a higher growth trajectory: The existing management headed by V Vaidyanathan (ex CEO and MD of ICICI Prudential Life and credited with building the consumer finance business at ICICI Bank) has a well laid-out strategy to expand in the retail and SME sectors. We see the re-energised management team in a better position to tap the vast opportunity in the high-growth retail product segments like gold loans, loan against property (LAP) and loan against shares (LAS). Moreover, the company is now well capitalised with a high capital adequacy ratio (CAR; total CAR @22.7% and tier-I CAR @18.5%) and the macro environment is likely to turn favourable as the monetary easing through policy rate cuts boosts credit demand in the retail, and small and medium enterprises (SME) segments. Consequently, the management expects to more than double its loan book to over Rs10,000 crore (Rs4,400 crore in Q2FY2013) in the next three years.  Robust asset quality with improving return ratios: The management's strategy of de-risking the portfolio by expanding the secured retail book coupled with a stringent credit origination and monitoring process will help to sustain the asset quality at the prevailing healthy levels. The company's gross and net non-performing assets (NPAs) were around 0.18% and 0.04% respectively (as of September 2012), the lowest compared with the peer group. The company's provisioning policy is more stringent than the regulatory requirement and hence would not be affected by the 90-day NPA recognition norm proposed by the Reserve Bank of India (RBI). We see scope for expansion in the return ratios (the return on equity [RoE] is expected to improve from 13.1% in FY2012 to 17% in FY2015) led by a robust growth in the earnings and the potential to improve the spreads as the company's funding cost comes down with an upgrade in its credit rating.  Weak macros and potential sale of Pantaloon Retail's 9% stake are risks: In addition to an unexpected deterioration in the macro-economic environment (its relatively high exposure to the real estate sector through loan against property makes it vulnerable), the potential sale of residual stake held by the Future group (which still has a 9% stake) in the open market could limit the upside in the stock in the near term.  A potential re-rating candidate-Buy: Capital First currently trades at about 1.2x FY2014E book value which is a significant discount to its peers like Bajaj Finance, Mahindra Financial Services and Shriram City Union Finance. The valuation discount is largely attributed to some legacy issues (higher wholesale lending) and a lower RoE. We believe the change in the ownership, the resolution of the legacy issues, the capital infusion and the ability to aggressively grow its loan book in the retail and SME segments could result in the re-rating of its valuation multiple. We initiate coverage on the company with a Buy recommendation and price target of Rs260 (1.5x the average of FY2014E and FY2015E book values). SECTOR UPDATE Automobiles In reverse gear Volumes decline post-festive season The domestic automobile (auto) companies are facing demand challenges after the end of the festive season in November. In December 2012, except for Mahindra and Mahindra (M&M; the automotive segment) and Hero MotoCorp (Hero), most of the auto companies reported a volume decline . On a year-till-date (YTD) basis, there has been a drop in the sales of most auto companies except for Maruti Suzuki (Maruti) and M&M. MHCVs and two-wheelers most affected  While the slowdown is broad-based, the medium and heavy commercial vehicle (MHCV) and two-wheeler segments have been affected the most. MHCV sales have witnessed pressure with a double-digit decline in volumes on a YTD basis. Two-wheeler sales have continued to moderate with the YTD growth slipping to low single digits.  FY2013 to end on a weak note, expect recovery in FY2014 Auto volumes are unlikely to recover in Q4FY2013, given the weak sentiment. Auto sales are likely to remain subdued in FY2013. We expect a gradual recovery in FY2014 on the back of an improved economic outlook, improved policy action and softening of the interest rates. Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.