Do it yourself

To understand the current state of automobile market in India, we met numerous people in the supply chain, users and prospective buyers over the last few days. Both rural and urban markets were covered in 4 states - UP, Haryana, Punjab and Delhi. The key takeaways from my discussions could be noted as follows: (a)    A sizable number of existing 4W passenger vehicle (4WPV) users has postponed their replacement decision in past one year. Most of the users who have replaced their vehicles in past one year have up traded. SUV still remains a preference in rural area. (b)    Almost 65% prospective 4WPV buyers (mostly first time buyers) of entry level vehicles have postponed their decision to buy. Most of these prospective buyers are not likely to buy in next 6 months also. The postponement of decision is due to a variety of decision - economic uncertainty (job, profession or business), poor availability of credit, buying vehicle decision linked to ...

1QFY20 Earnings - pain aggravating The latest earning season has been disappointing on most counts. If we can avoid getting into the nitty-gritty of the performance relative to corresponding quarter of last year or immediately preceding quarter, we shall find the reported earnings much below par across most sectors. The earnings totally belie the high hopes, the street had from FY20 earnings. There is a stampede amongst analysts to downgrade earnings estimates to bring these in line with the market conditions. The unfortunate part is that the revised earnings estimates also mostly appear driven by the prevailing stock prices and not by the earnings potential and prospects of businesses; and hence may not be reflecting the true state of the anticipated corporate performance. A significant majority of corporate managements guided caution in terms of near term growth, indicating that the 2QFY20 earnings may also not be encouraging. 2HFY20 outlook is generally opti...