Suprajit Engineering Ltd| Q1FY24 Result Update | Weak performance, short-term looks cloudy, Reduce! CMP: Rs 406 | Target Price: Rs 401 | Upside: -1.0% | Rating: Reduce Posted subdued set of numbers whereas Revenue/EBITDA/PAT was lower than our estimates by 8%/25%/33% respectively. This was largely due to the soft export performance, flattish domestic, and this resulted in a hit on the EBITDA Margin (10.5% - one of the lowest). Q2FY24 is seasonally weak in exports, while delayed festivals will also put pressure in domestic. The discretionary spends cut in the US market is not going to come back in a hurry, projected a gradual revival QoQ. Despite the uncertain global environment, the outlook maintained 1) 5-10% higher growth vs. India auto industry, and 2) 12-14% EBITDA Margin band in FY24. We are convinced with hockey-stick growth in the Electronics division, but very low single-digit margin will be a drag. Healthy FY25 on cards due to expectation of pent-up demand. We have projected Revenue/EBITDA/PAT to grow at 11%/19%/29% respectively FY23-FY25e, but not comfortable with the valuation (trading at 22.2x FY25e EPS), hence downgrading the stock from Accumulate to Reduce. Q1FY24 – performance not on the expected lines • Reported lower than estimated performance across parameters. Revenue at Rs 6,797mn (+5% YoY & -3% QoQ) vs. est of Rs 7,405mn. EBITDA Margin at 10.5% (+216bps YoY & -194bps QoQ) vs. est 12.9%. Reported PAT at Rs 331mn (+21% YoY & -19% QoQ) vs est. Rs 498mn. • Suprajit reground its business into four new segments, where margin improved YoY on a low base. Q1FY23 margin was low due to 1) higher gas price impact in Phoenix, 2) lag of passing cost in Non-auto, 3) incorporated LDC in financials which reported negative 4.5% margin. • In Q1FY24, Domestic Cable Division’s revenue was flat YoY at Rs 2,398mn due to weakness in the 2W & aftermarket. • Suprajit Controls Division reported 8% YoY growth in the revenue at Rs 3,494mn. Largely non-auto cables, the US and the Chinese market was slow in Q1, while other markets reported double-digit growth. • Phoenix Lamps division revenue grew by 5% YoY to Rs 877mn. It incurred some one-off expenses related to Trifa Lamps (under liquidation). • Electronics Division reported Rs 28mn in revenue with negative EBITDA Margin of 1.6%. It has Rs 1.5bn of orders in hand, will get executed in 1-2 years’ time. Suprajit Electronics Division (SED) – to drive future growth of Suprajit • Recently incorporated the plant in Bengaluru in Nov ’22, received orders of Rs 1.5bn, mostly from EV customers and majorly for Digital Instrument Clusters. • Orders are executable in 1-2 years time, and the product price is 8-10x higher than the normal cable. Added India’s largest EV maker in the clients list. • We expect it to generate Rs 300mn revenue with +1% EBITDA Margin, however the potential is good & sees this business scaling up to Rs 1.2bn by FY25e with projected 5% EBITDA Margin. Suprajit Controls Division (SCD) – contributes ~50%, but outlook is blurred • It includes auto/non-auto exports and LDC. We estimate revenues of Rs 15.0/16.5bn in FY24e/FY25e respectively with EBITDA Margin of 8.6%/10.6% for the same period. • Non-auto piece of business was a drag in Q1 as customers sharply curtailed production schedules, the weakness to continue in Q2. • LDC was impacted slightly due to softness in the Chinese market. A gradual pickup is anticipated in the overall division in the 2nd half. • Efforts on the LDC business are ongoing to reduce costs, and take its Margin to double-digit level. • The combination of Wescon business improving in FY25, and LDC margin anticipated to touch double-digit, will take the overall segment’s margin at 10.6% in FY25. Domestic cables and Phoenix lamps to grow at a steady pace • Domestic Cables Division and Phoenix Lamps division expected to grow at low double-digit CAGR. • New addition of EV players, EMA in domestic and gradual increase in t

Hero MotoCorp Ltd | Q1FY24 Result Update | Aggressive launches to drive share & growth, valuation attractive, BUY! CMP: Rs 2,995 | Target Price: Rs 3,520 | Upside: 17.5% | Rating: Buy Adjusted PAT matched our estimates, ex-EV EBITDA Margin is at much superior level at 14.5% (near to the pre-Covid level of 14.7%). The focus is to drive growth & market share improvement. Healthy pipeline of new launches ahead in the 125cc, mid & upper premium will improve showroom footfalls, volumes as well as margins. The outlook on commodities is stable, LEAP-II benefits, new products, higher X-tec sales along with operating leverage to support margin improvement. However, the intent is to reinvest incremental margin improvement in the EVs & new products, hence believe that EBITDA Margin to remain at 13.5-14.0%. Exports too is getting better MoM, response for X440 is higher than expectations, domestic in H2 should be better driven by festivals, improvement in macros & new products. Anticipate ~8% volume CAGR FY23-FY25e, largely maintained estimates and target price. Recommend BUY! Adjusted PAT matched estimates, EBITDA per unit is the highest in any quarter  Revenue growth of 5% YoY largely led by a 7% increase in the realization, offset by 3% drop in volumes for the same period. Pricing & mix resulted in higher realization.  Increase in the topline & soft commodity prices (RMC declined by 341bps YoY to 69.4% of sales) led to 18% YoY growth in gross profit (GM improved by 341bps YoY to 30.6%), offset by ~100bps impact due to EVs. EBITDA per unit is the highest in any quarter at Rs 8,918.  Higher gross profit & LEAP-II savings driven 28% YoY growth in EBITDA, while EBITDA Margin is 55bps higher than estimates to 13.8%. Mix, pricing, operating leverage & softness in commodity prices along with LEAP-II benefits led to margin improvement.  Reported PAT is 13% lower than estimates largely due to one-off ~Rs 1.6bn due to VRS, Adj. PAT of Rs 9,447mn matched our estimates. 319% YoY increase in Other income & better operational performance driven 32% YoY growth in reported PAT. Offset by one-off ~Rs 1.6bn expense towards VRS. Margin target nearly achieved, focus turned to growth & market share  Good operational performance in Q1FY24 as EBITDA Margin was higher than our estimates at 13.8%. Infact, ex-EV business, this number is at much superior level at 14.5% (near to the pre-Covid level of 14.7%). It reached at guidance range of 14-16% band.  We believe the company’s overall margin should improve going ahead led by stability in commodities, new products, higher sales of an X-tec range to provide better operating leverage. However, the incremental improvement will get reinvested in new products and EVs. Hence, believe 13.5-14.0% EBITDA Margin band should sustain till FY25e.  X440 received 25K+ bookings, deliveries to start from Nov ’23. The plan is to ramp up production & will reopen the booking window soon. Talks are ongoing for introducing new products & exports with Harley, should be positive in the mid-term.  Hero to launch a re-badged version of X440, to relaunch iconic Karizma in a new avatar, a lot of variants/new products planned in the 125cc+ segment should drive volume growth.  On EVs, the plan is to expand the distribution reach to 100 cities (from 36 at present) in FY24, to launch a few products for serving different segments in FY25, and post that scale benefits & cost savings to follow. Started working with Ather, & to use its charging network for Hero’s EV customers.  On demand outlook, the management expects 2nd half to be better led by an improvement in macro parameters, festivals, elections & new products. Harley, EV, new products and improvement in the rural to drive ~8% volume CAGR FY23-FY25e. Outlook and Valuations  Conservatively projected, and believe there is a value in the stock. All negatives look to be factored in and suggest it’s worth taking a stake, looking at 360-degree efforts across b

Mayur Uniquoters Ltd | Q1FY24 Result Update | High margin exports business to be on higher growth trajectory CMP: Rs 498 | Target Price: Rs 617 | Upside: 24.0% | Rating: Buy Mayur Uniquoters came out with a decent set of performance in Q1FY24, led by good show at exports front on YoY basis. With PVC price stabilization, the company maintained its margin performance ~20%. The management highlighted many growth levers especially at auto exports front where they have received good order indication for the next several years. With Chinese imports contuniung, issues remain on the PU front, and Mayur is in talks with several brands to propel this business. We maintain BUY rating on Mayur Uniquoters with a slightly upgraded TP of Rs 617, as the company is expected to get traction in higher margin business clients. Mayur is set to get good amount of new businesses from Mercedes and BMW in coming years. With volume recovery in footwear, the ramp up of PU plant and businesses from new clients such as VW, Mercedes, and BMW, we expect a much stronger performance from FY24 onwards. Flattish operational performance in Q1, better performance expected from H2 onwards  Revenue came in at Rs 1,919mn, a small de-growth of 4.5% YoY / 3.5% QoQ, in-line with estimates. YoY decline is mostly on account of the realization decline.  With higher business from existing US OEMs clients and the continuation of new Mercedes business, export business has done well. Margin has been stabilized at ~20%, improvement possible in coming quarters  EBITDA stood at Rs 386mn, with a margin of 20.1% during the quarter compared to 18.4% in Q1FY23 and 20.2% in Q4FY23. Decline in the PVC prices is helping at the Gross margin level and the company could maintain decent margin.  On the consolidated level in Q1FY24, it posted sales of Rs 2,009mn, up 0.2% YoY and PAT of ~Rs 305mn, up 12.7% YoY. Several new opportunities to fuel the momentum, strong guidance from the management  Besides, working on BMW business, the company is working on a big opportunity on the Auto PU front, which has huge potential to aid growth. The management indicates an export OEMs business to multiply when businesses from new clients reach to guided levels by clients.  The management has lowered down its guidance for FY24 and guided for 12-15% growth in FY24 with better traction in H2FY24. Overall revenue to grow by 18% CAGR FY23-FY26e.  The company continues to focus on high margin businesses and new client additions in higher margin business will continue in the future. The start of the BMW business and ramp up of Mercedes business will further boost margins going forward. As per the management, BMW business will kick-start from Q4FY24 onwards. Outlook and Valuations  Besides working on high margin exports business, the management is focused on the increasing presence at retail front. They are onboarding dealers across India to increase brand visibility.  On PU front, sales are yet to be ramped up as Chinese imports are still high. The management is in the talk with the government to curb illegal imports. Plus, they are in talk with several brands to supply PU materials.  Considering BS strength and consistent handsome payouts to shareholders, we value Mayur at 18x its FY25e earnings to arrive at a TP of Rs 617 apiece and maintain BUY.

Eicher Motors Ltd| Q1FY24 Result Update | Check reveals - competition will take time to hit structurally, Accumulate! CMP: Rs 3,380 | Target Price: Rs 3,737 | Upside: 10.5% | Rating: Accumulate Q1FY24 was slightly above estimates due to strong cost controls, pricing benefits & 80bps savings in sourcing. Reported highest quarterly Revenue/EBITDA/PAT and EBITDA per unit. Margins are sustainable as exports situation is improving, no major pain visible in commodities, along with VAVE benefits. Domestic demand is improving and festival outlook is healthy. In our view, RE will be able to deal with the competition due to the combination of 1) its healthy new product pipeline, 2) reach & smart expansion of the network, 3) eight strong existing brands, 4) service network, and 5) bikers community will be able to withhold competitive pressures for the initial few years. We strongly believe that the market itself is expanding, but new global competitors have the power to slow down Royal Enfield’s growth. Thus, cut target multiple from 25x to 23x, however margin surprise in Q1 & its sustainability upgraded our EPS by 11%/7% for FY24/FY25 respectively. We more or less maintained our target price of Rs 3,737, however due to recent stock price correction, upgrade Eicher Motors stock from Reduce to Accumulate. Onground data shows RE’s strong positioning, but not ruling-out share loss in the mid-term • Royal Enfield dealers have not witnessed any cancellations post Harley/Triumph launch, and inquiries/bookings run-rate continues to remain healthy. Festivals are expected to remain good. New models from RE will be able to handle the competition effectively. • However, all dealers indicated that customers wants to test ride x440, and once the HD dealer network expands effectively, and service network usage clarification comes then over the period Royal Enfield’s sales growth will taper down. • Our view is that in this competitive environment, it’s not possible for any automobile brand to hold on to a 90%+ market share for a long time. Post share loss in the mid-term, RE will still hold the lion’s share in the 350cc+ segment. • We strongly believe that the market itself is expanding in the 350cc category. As per our checks with HD dealers, they are getting some upgraders not only from RE, but also from Pulsars/Apache/H’ness as well. Hence, new breed, young crowd is getting pulled towards 350cc segment. Competitors will time to eat RE’s share due to strong existing/new products & reach • Harley/Triumph are globally aspirational brands, however RE’s existing eight brands, strong new upcoming distinguished products and its premium stores reach in the semi-urban zones (2,059 touch points), along with strong fan base will keep the competitors at a bay. • There are structural changes happening in the upper premium category in 2Ws, but it will take time for the competitors to create number of brands and increase reach to eat away RE’s share. Volume growth to taper-down, realization growth to remain under check • The era of high double-digit growth looks to be over for Royal Enfield. We projected Domestic/Exports to grow at a CAGR 8.0%/6.5% FY23-FY25e. The growth should remain in mid-single digit from FY25e for Royal Enfield as this time the competition is serious. • Royal Enfield was earlier enjoying strong pricing power, however that till will come under check. We believe it’s very difficult for RE to increase prices post entering of global aspirational brands. Hence, expect ~3% CAGR growth FY23-FY25e vs. 8.6% CAGR witnessed between FY17-FY23. Good potential in exports, macro situation expected to gradually improve • The market size in mid-size motorcycle is about 1mn+ overseas, and RE exports about 0.1mn units. Hence, the potential opportunity is good. • RE’s volumes should continue to grow in double-digit in exports as they keep launching new products, expand their touch points and grow community in international markets.

Maruti Suzuki India Ltd | Q1FY24 Result Update | Strong orders & new products success to drive growth, valuation caps upside! CMP: Rs 9,820 | Target Price: Rs 10,357 | Upside: 5.5% | Rating: Accumulate The reported PAT was slightly higher than our estimates largely due to better mix, higher realization & other income. In our view, the company showcased market share gains in Q1FY24 (led by SUVs), and this traction should continue led by higher sales from UVs, strong order book execution (355K units), full year benefits of recently launched models, along with expected CNG traction to maintain Maruti’s outperformance in domestic. The company is also taking charge in exports, gaining share overthere too since last few years. Maruti Suzuki’s planned acquisition of SMG (incorporated from FY25e) will be more or less a neutral deal & will largely keep EPS the same. Guided soft commodities ahead, higher mix of UVs and operating leverage to improve margins. We maintain a long-term optimistic view on Maruti Suzuki, however, most of the positives are priced-in the stock and we see limited upside. However any correction in the stock should be an opportunity to Add. We downgrade the stock from Buy to Accumulate only due to valuations with a revised fair value of Rs 10,357 per share. Q1FY24 result analysis • Better mix & price increase led to higher than expected rise in the realization (+14.6% YoY to ~Rs 649K vs. est ~Rs 632K). Revenue surpassed estimates by 2.8% to ~Rs 323bn in Q1FY24. • EBITDA Margin came in lower than estimates at 9.2% (vs. est 10.3%) due to 80bps negative one-off hit on employee expenses. The company has paid one-off retention bonuses to some employees, its non-recurring in nature. Adj. EBITDA Margin was 10.0% and Adj. EBITDA was ~Rs 32.4bn (vs. est ~Rs 32.5bn). • Other expenses increased higher by 19% YoY owing to the expenses towards new product launches, A&P, etc. Reported PAT was Rs 24.8bn (+145% YoY), higher than est. of Rs 23.7bn. This was largely owing to substantial increase in other income (+1,031% YoY to ~Rs 10bn). SMG acquisition update • Maruti to acquire Suzuki Motor Gujarat (SMG) at book value. The transaction to complete by the end of Mar ’24 after taking all regulatory & minority shareholders approval. The amount & mode of payment will be decided in the subsequent board meeting. • In our view, this is just a financial transactions and won’t impact EPS much. • We have incorporated SMG acquisition in FY25e by assuming SMG’s net worth at ~Rs 127bn. At present, SMG D&A is placed in Other expense line item. • Post-acquisition, this depreciation will move to the actual D&A line item of Maruti. Hence, EBITDA Margin will improve (from 11.0% in FY24 to 12.6% in FY25), but there is hardly any impact on the EPS apart from slightly lower other income (as cash will be used to buy SMG). UVs driving market share, volumes & realization • The UV sales for the industry in Q1FY24 YoY grew by ~18% vis-à-vis Maruti’s UV growth of whooping 56% for the same period, thus resulted in market share gains by 572bps YoY to 23.1% in Q1FY24. • The new model portfolio viz. the new Brezza, Grand Vitara, Fronx, Jimny and Invicto has been reasonably doing better than the expectation as per our checks. In addition, Ergita MPV is a blockbuster product for Maruti. The full year benefits of a few UV models is yet to come. • The company has a strong order backlog of 355K units, and the majority has UVs in it. • Maruti was earlier lagging in safety and premium features in a car, however, that has changed now. It started offering premiumization inside & outside with safety and keeping its value proposition intact. This can pull a young crowd towards Maruti’s showrooms. • The success of a new model portfolio to drive volumes higher than the industry, and grow realization handsomely, which was visible in Q1FY24 (~14.6% YoY). Silently growing export sales, while entry level expected to pick-up in H2 • Maruti’s annu

Maruti Suzuki India Ltd | Q1FY24 Result Update | Strong orders & new products success to drive growth, valuation caps upside! CMP: Rs 9,820 | Target Price: Rs 10,357 | Upside: 5.5% | Rating: Accumulate The reported PAT was slightly higher than our estimates largely due to better mix, higher realization & other income. In our view, the company showcased market share gains in Q1FY24 (led by SUVs), and this traction should continue led by higher sales from UVs, strong order book execution (355K units), full year benefits of recently launched models, along with expected CNG traction to maintain Maruti’s outperformance in domestic. The company is also taking charge in exports, gaining share overthere too since last few years. Maruti Suzuki’s planned acquisition of SMG (incorporated from FY25e) will be more or less a neutral deal & will largely keep EPS the same. Guided soft commodities ahead, higher mix of UVs and operating leverage to improve margins. We maintain a long-term optimistic view on Maruti Suzuki, however, most of the positives are priced-in the stock and we see limited upside. However any correction in the stock should be an opportunity to Add. We downgrade the stock from Buy to Accumulate only due to valuations with a revised fair value of Rs 10,357 per share. Q1FY24 result analysis • Better mix & price increase led to higher than expected rise in the realization (+14.6% YoY to ~Rs 649K vs. est ~Rs 632K). Revenue surpassed estimates by 2.8% to ~Rs 323bn in Q1FY24. • EBITDA Margin came in lower than estimates at 9.2% (vs. est 10.3%) due to 80bps negative one-off hit on employee expenses. The company has paid one-off retention bonuses to some employees, its non-recurring in nature. Adj. EBITDA Margin was 10.0% and Adj. EBITDA was ~Rs 32.4bn (vs. est ~Rs 32.5bn). • Other expenses increased higher by 19% YoY owing to the expenses towards new product launches, A&P, etc. Reported PAT was Rs 24.8bn (+145% YoY), higher than est. of Rs 23.7bn. This was largely owing to substantial increase in other income (+1,031% YoY to ~Rs 10bn). SMG acquisition update • Maruti to acquire Suzuki Motor Gujarat (SMG) at book value. The transaction to complete by the end of Mar ’24 after taking all regulatory & minority shareholders approval. The amount & mode of payment will be decided in the subsequent board meeting. • In our view, this is just a financial transactions and won’t impact EPS much. • We have incorporated SMG acquisition in FY25e by assuming SMG’s net worth at ~Rs 127bn. At present, SMG D&A is placed in Other expense line item. • Post-acquisition, this depreciation will move to the actual D&A line item of Maruti. Hence, EBITDA Margin will improve (from 11.0% in FY24 to 12.6% in FY25), but there is hardly any impact on the EPS apart from slightly lower other income (as cash will be used to buy SMG). UVs driving market share, volumes & realization • The UV sales for the industry in Q1FY24 YoY grew by ~18% vis-à-vis Maruti’s UV growth of whooping 56% for the same period, thus resulted in market share gains by 572bps YoY to 23.1% in Q1FY24. • The new model portfolio viz. the new Brezza, Grand Vitara, Fronx, Jimny and Invicto has been reasonably doing better than the expectation as per our checks. In addition, Ergita MPV is a blockbuster product for Maruti. The full year benefits of a few UV models is yet to come. • The company has a strong order backlog of 355K units, and the majority has UVs in it. • Maruti was earlier lagging in safety and premium features in a car, however, that has changed now. It started offering premiumization inside & outside with safety and keeping its value proposition intact. This can pull a young crowd towards Maruti’s showrooms. • The success of a new model portfolio to drive volumes higher than the industry, and grow realization handsomely, which was visible in Q1FY24 (~14.6% YoY). Silently growing export sales, while entry level expected to pick-up in H2 • Maruti’s annu

Swaraj Engines Ltd | Q1FY24 Result Update | In-line quarter, set for further outperformance, maintain BUY! CMP: Rs 2,018 | Target Price: Rs 2,358 | Upside: 16.8% | Rating: BUY Swaraj Engines (SWE) reported highest quarterly PAT & matched our estimates. Looking at the demand scenario, the company plans to increase the capacity from 150K units annually to 195K units through internal accruals. On ground momentum reveals neutral to the mixed body language of dealers due to uneven distribution of rainfall, offset by healthy crop prices & increase in MSPs. Factored in a low single digit tractor industry growth in FY24e, considering India reported its highest ever yearly sales in FY23 (high base). Anticipate a gradual possible shift of business from Kirloskar to Swaraj Engines Ltd in the coming years. Its outperformance vs. the industry should continue going forward as ‘Swaraj’ is known among quality names in the industry & continued flow of business due to shift will keep giving additional volumes as compared to the previous year. Considering sound fundamentals, consistent dividends and possible increase in the business makes SWE a good investment avenue. We maintain BUY rating on the stock with a revised target price of Rs 2,358 apiece (valued at 18x FY25e EPS of Rs 131). Outperformed industry YoY, posted highest quarterly PAT  Quarterly numbers nearly matched our est. Swaraj Engines volumes were flattish YoY in Q1FY24 (high base) vs. domestic tractor industry de-growth of 1.9% for the same period.  Despite flattish Revenue/EBITDA YoY, it posted highest ever quarterly PAT of Rs 409mn (+4% YoY & +17% QoQ), driven by ~53% YoY jump in Other income in Q1FY24.  QoQ EBITDA Margin improved by 46bps to 13.8% in Q1FY24 largely owing to superior operating leverage as volumes/revenues were higher by ~10%/11% respectively. Proved its outperformance over the long period, confident of sustaining the same  Domestic tractor industry posted 5% CAGR FY14-FY23 vs. Swaraj's engine sales of 7% CAGR & revenue CAGR of 10% for the same period.  We believe this outperformance should continue as Swaraj is known for the quality as per our checks, plus there is a flow of business observed from the Kirloskar to Swaraj (after Kirloskar's exit from Swaraj Engines) will keep giving additional volumes vs. previous year.  Similarly, Q1FY24 industry de-grew by ~2% YoY, whereas Swaraj's engine sales were flattish. Tractor industry ground check reveals low single digit growth on high base  Industry posted 1.9% YoY de-growth in Q1FY24. As per our recent dealers check, the industry is poised to gradually improve from Q3FY24 onwards considering near normal monsoons, recent increase in MSPs, better crop prices in mandis & government has been supportive to improve farmers’ income by various schemes. No major changes in discounts, & inventory situation is near normal.  On the negative side, some states may witness lower growth due to uneven distribution of rains. Overall, in our view, FY24e would see a low single digit growth. A good rural spending on cards by GoI one year before national election can push growth higher than our estimates. Outlook and Valuations  Looking at the good future demand scenario, the company will increase the engine capacity from 150K units annually to 195K units, and this will be funded through internal accruals.  Swaraj has been giving higher dividend, offering buyback schemes & has been generating strong FCF with a good amount of cash balance in the balance sheet.  After projecting conservatively, Swaraj is attractively trading at P/E of 15.4x FY25e EPS of Rs 131.  Arrived at a target price of Rs 2,358 per share, which offers an upside of ~17%. Considering sound fundamentals and possible increase in the business will make SWE a strong beneficiary of the same.  We believe with the expectation of the gradual flow of business from Kirloskar to Swaraj Engines will continue the company’s outperformance,

SJS Enterprises Ltd | Q1FY24 Result Update | One more outperformance, exports revival & WPI to boost earnings! CMP: Rs 645 | Target Price: Rs 745 | Upside: 15.4% | Rating: Buy Q1FY24 numbers nearly matched our estimates. SJS consolidated revenue grew by ~14% YoY vs. industry growth of ~3% for the same period, thus one more outperformance. We have incorporated Walter Pack India (WPI)’s acquisition effective Q2FY24, which is a 30%+ EBITDA Margin business, will provide tech-edge, new customers & boost earnings. The management guided 50% consolidated revenue growth and 40% PAT growth in FY24. Suggested FY24-26 revenue CAGR of 20-25% with consolidated EBITDA margin range of 25-27%. We believe Revenue/EBITDA CAGR 16%/19% respectively FY24e-FY26e is doable driven by the combination of rebound in high margin exports, WPI, along with growing existing large accounts by cross-selling and premiumization. Taken strategic decision to postpone Exotech’s new plant by one year, which we believe is positive & will ease cash flows in WPI’s acquisition year FY24. Consolidated WC days to improve as WPI has ~60 days of net WC days vis-à-vis ~90 days for SJS+Exotech. We maintained BUY recommendation on SJS Enterprises with a revised fair value (post incorporating WPI) of Rs 745 per share, assigned 20x FY25e EPS. Result analysis – Outperformed driven by a revival in exports  Consolidated revenue was Rs 1,172mn, grew by ~14% YoY in Q1FY24. Both standalone (+13%) as well as Exotech (+16%) contributed to this growth. SJS outperformed the industry growth of ~3% largely due to ~90% YoY growth in exports revenue on a low base.  The revival in high margin export business (Q1FY24: 10.7% vs. Q4FY23: 7.9% of revenue) and increase in the contribution from new products (~10% of revenue) improved EBITDA Margin by 154bps QoQ to 24.1% in Q1FY24. Lower contribution from Exotech (-565bps QoQ to 29.3% of revenue) also supported margins.  Other expenses have one-off Rs 8mn due to provision on GST interest, and there was an increase in the sub-contracting employees. Adj. EBITDA margin is 24.7%. WPI – to provide niche tech-edge in IML/IMD/IME/IMF, cross selling opportunities exist  WPI’s reported 22% YoY growth in topline to Rs 356mn in Q1FY24 with impressive 31.6% EBITDA Margin (including other income). We anticipate this momentum will maintain. Incorporated Rs 1,170mn (for 9 months) in FY24e and Rs 1,463mn in FY25e with Margin of 30.5%/31.0% in FY24e/FY25e (ex-other income) respectively.  The 20-25% CAGR growth in WPI will be driven by cross-selling opportunities with SJS 2W, PV & CD clients, and to start exporting as well. We trust the company will be able to maintain ~31% EBITDA Margin as royalty to the parent reduced from 3.5% to 1.0% of the revenue, offset by new products development & expansion. Exports is on a clear recovery path, high margin business  Exports reported over 90% YoY growth in Q1FY24 on a low base driven by recovery in European market and new business wins.  In Q1FY24, reported export revenue of ~Rs 125mn. Based on the current run-rate, exports revenue will cross Rs 500mn in FY24e, higher than its previous high made in FY22 of ~Rs 468mn.  We anticipate demand coming back in general across major export markets, with management putting extra efforts by hiring senior sales team in key geographies.  It’s a high margin business and should support in overall EBITDA margin improvement going forward. Standalone and Exotech uprun to continue  Exotech’s new plant will come by the end of FY25e which can generate peak revenue of Rs 3bn. At present, the company is doing de-bottlecking in existing plants, and using outsourcing model to execute the large order book.  Exotech generated revenue of ~Rs 1,369mn in FY23, we anticipate 20% CAGR FY23-FY25e to touch Rs 1,986mn with an EBITDA margin in the range of 14-15%.  The growth will be driven by introducing new products, cross selling with SJS customers and beginning of e

Bajaj Auto Ltd | Q1FY24 Result Update | Triumph & Exports recovery factored-in, limited upside! CMP: Rs 4,843 | Target Price: Rs 5,180 | Upside: 6.9% | Rating: ACCUMULATE Slight miss across parameters largely on account of higher than expected increase in RMC. Softness in the commodity prices was more than offset by drop in product & geographic mix. 3Ws contribution dropped by ~210bps QoQ to 13.4%, while Exports contribution dropped by ~260bps QoQ to 37.6% of the total volume in Q1FY24. However, cost rationalization efforts were clearly visible across line items. We believe the mix is getting better from Q2FY24 onwards as 1) exports improved ~12% QoQ in Q1FY24, every quarter will be better from hereon, 2) the contribution of premium products, Triumph, and increase in electric two & three wheelers to take-off, and 3) three-wheelers business in general is on a rebounding mode. All these will not only improve volumes for Bajaj Auto, but also margins going forward. Additionally, guided for stable commodities is icing on the cake. To launch new Pulsar variants in the near future, and 1-2 Triumph models in the coming years. We have factored-in most of the positives on volumes, better mix and margin improvement, but valuation caps upside. We have upgraded EPS by ~4%/6% in FY24/FY25 respectively considering positivity across businesses and maintain Accumulate rating with a revised fair value of Rs 5,180 per share. Losing market share is a concern, recent share gain sustenance is key to watch  Bajaj Auto has been underperforming motorcycle industry over the long period. In FY23, it lost 88bps domestic motorcycle share to 17.3%. Exports 2W market share too has been sliding, in FY23 it dropped by 458bps to 44.8%. This is mainly due to increase in the competitive intensity.  2W industry posted ~11%/15% YoY/QoQ increase in Q1FY24. Noticed some market share gains for Bajaj motorcycles in Q1FY24 (+137bps QoQ to 19.1%) & will keep it under observation for sustainance of the same.  3W industry posted ~89% YoY growth in Q1FY24. Its in a clear uptrend and traction should continue for the next 2-3 years. Bajaj with its strong product portfolio has been leading the pack with improvement in the market share.  Going forward, we expect Bajaj Auto to grow higher than the industry growth mainly due to faster expansion of EV network and incorporated Triumph (37,500 units in FY24 and 85,500 units in FY25).  We anticipate total domestic volumes to grow at 14.5% CAGR FY23-FY25e. Exports bottomed out, but most of the positives priced-in  Sales from international markets bottomed out and started picking up on a MoM basis. 2W industry volumes were higher in Q1FY24 by ~13% QoQ.  This traction of QoQ improvement should continue and we trust that Bajaj’s exports should grow by 7% in FY24, and in high teens ~17% on a low base in FY25. EBITDA Margin to improve led by better mix, soft commodities & scale  Better mix in the coming quarters with revival in exports should support in margin improvement. Along with this, some softness in the commodity prices & operating leverage benefits to improve margins further.  EBITDA Margin of 19.3%/19.7% in FY24/FY25 respectively is doable, in our view. Triumph and EVs to play crucial role in outperforming the market  Triumph received 17,000 bookings, dispatches started, exports to commence from October 2023. A few models/variant launches are on the cards.  On EVs, launched electric three-wheelers in Agra & Pune, to ramp-up from September onwards. On electric two-wheelers, network expansion along with new models will help in gaining market share.  Both these new segments are crucial and will help Bajaj Auto to outperform market growth in the coming years. Outlook and Valuations  We have upgraded EPS by ~4%/6% for FY24/FY25 respectively on account of 1) visible cost rationalization efforts, 2) incorporated Bajaj-Triumph, 3) increase in EV sales, and 4) expectation of a gradual recov

Ashok Leyland Ltd | Q1FY24 Result Update | Exceptional beat - Reasonable demand, share & margins to improve further! CMP: Rs 182 | Target Price: Rs 215 | Upside: 18.0% | Rating: Buy Remarkable outperformance on operational and bottom line majorly led by the combination of 1) better than expected benefits from lower commodity prices, 2) superior cost rationalizations, and 3) effective tax rate was very low (~7%) due to deferred tax credit. Despite ~31% QoQ drop in volumes, it maintained double-digit EBITDA Margin is commendable. Annually, it has been gaining market share driven by network expansion & new products, and has been reducing debt. The focus is on growing exports, deepening domestic market penetration and maintaining good profitability. The management is bullish on the ongoing CV cycle (+8-10% MHCVs & +5-7% LCVs), and it will be one of the longish upcycle as on ground fundamentals are strong. Ashok Leyland will outperform industry growth as they are expanding its presence in less penetrated zones, entering into the large SCV market to fill white spaces faster and new products introduction to continue in across sub-segments including EVs. Positively, discounts are getting lower with better price retention. Additional market share to come as buses where Ashok Leyland is one of the leaders has been rebounding, huge headroom for growth in ICV/SCV, where it’s taking the required actions with intelligently expanding network, and MHCV in general is in the upcycle should benefit the company due to its strong presence in it. Further upside can come if the scrappage policy is effectively implemented. We upgrade its fair value to Rs 215 after looking at its all-around exceptional outperformance in Q1FY24. Margin – targets mid-teens, directionally placed right  Due to transition & investments required in new technologies, the company is putting all its efforts to improve its operational performance. We believe the company is at its best and should yield in best operating leverage in the coming two years.  This, along with lower discounts, increase in exports contribution, VAVE & improving efficiencies, among other measures should definitely improve its margins to mid-teens in the 3-5 years time. Projected ~11.5%/12.0% in FY24/FY25 respectively. Expanding in LCVs & exports to provide additional volume support  To grow its LCV reach and introduce a few new products will provide required volumes support to outperform the industry growth. The aim is to become a full-range player.  It’s not present in 0-2 tons segment & plans to enter. To improve market share in 2-3.5 tons from ~20% to ~25% and increase the share in 3.5-7.5 tons from 5% at present.  LCV is a very large sub-segment (60-65%) of the CV industry, where the company has less presence. In the last peak cycle year (FY19), LCV market share in domestic was 8.6%, which improved to 11.1% in FY23.  We have conservatively forecasted domestic LCV volumes to grow by ~8%/5% in FY24/FY25 respectively to touch ~77K units.  In exports total CV market, Ashok Leyland improved its share by 239bps YoY to 14.3% in FY23. It has been entering progressively in a number of markets along with newer products, helping it to outperform vis-à-vis the industry growth.  The aim is to double the export volumes by entering new geographies and introducing newer products. Additionally, have ambition to grow its non-CV businesses as well. Gaining share in trucks, while buses rebounding  Improved market share by 548bps to 32.3% in MHCV trucks in FY23. The aim is ~35% in the coming years. This is possible due to dual efforts of increasing penetration in its weak zones viz. North & East India, and revamping product portfolio. AVTR is supportive.  Number of outlets increased from 679 in FY19 to 809 in FY23. It will increase to 875 in FY24e. The addition of network along with new products to increase visibility & growth.  Bus industry has been on a rebounding trajectory driven

TVS Motor Company Ltd | Q1FY24 Result Update | The best is yet to come, Accumulate! CMP: Rs 1,307 | Target Price: Rs 1,467 | Upside: 12.3% | Rating: ACCUMULATE Reported operational performance was near in-line, while bottom line was slightly better due to higher than expected other income, which is largely due to one-off income of ~Rs 556mn as profit from divestment of stake in an associate company. Post adjusting one-off other income, Adjusted PAT is lower by 6.5% vs. our estimates. TVS reported the highest ever EBITDA/unit and EBITDA Margin in Q1FY24. Overall, YoY TVS performance in Q1FY24 looks healthy and margin improvement trajectory is commendable. On the outlook, exports started recovering and QoQ situation will continue to improve. Clear recovery is visible on the domestic piece of business, exciting launches ahead to keep customers delighted. TVS has been gradually gaining market share across geographies, and margin improvement trajectory is praiseworthy. This traction should continue and we trust that the company will maintain its outperformance in the coming years. They are not leaving any stone unturned in the EV space, have a strong order book, good pipeline of launches, and making critical components inhouse to keep costs under control. What we most like about the company is that they are completely focused on making their products ‘Hero’ to win customers and is the reason to gain market share. We have marginally tweaked estimates looking at the strong commentary from the management specially on margins. Maintain Accumulate with a revised fair value of Rs 1,467 per share. Exports piece of business is getting better, smartly outgrowing market  We are witnessing a gradual MoM improvement in export volumes, and this traction should continue. No further corrections are required in stocks, the 2nd half is expected to be much better.  Despite ups/down in the market every two-three years, TVS has been smartly overtaking the industry every year and has been gaining share from ~11% in FY13 to ~25% in FY23. In Q1FY24, it gained 197bps share QoQ to ~25%.  We have projected exports to grow by ~8%/20% in FY24/FY25 respectively. This will be driven by rising acceptance of TVS products, to introduce newer products/variants incl. EVs, improving penetration in existing markets, and entering in new countries. Domestic – recovery is visible, TVS making products as ‘Hero’ to gain share  Urban zones are better positioned, while rural recovery to improve gradually. TVS targets to upgrade customers by offering feature rich premium products.  It keeps innovating existing range, and has been successfully launching new products/variants to get customers attention. More number of launches are on cards.  Products are core to the TVS success, they make their products as ‘Hero’ and has been witnessing share gain consistently over the period. From ~13% in FY13, it’s share touched ~16%+ in FY23. Most of the gains came in from the scooters portfolio.  Total domestic volumes to increase by 12.8% CAGR FY23-FY25e to touch ~3.32mn units. This will be driven by the positive response for new launches, market shifting to 125cc+ segment and premiumization. More new products are on the cards should help.  We are confident that TVS will outgrow the domestic industry led by its extensive product portfolio starting with Apache, Jupiter, Raider, NTORQ, Ronin, & many others. Margins improvement trajectory to sustain  TVS has the potential to touch its peer level EBITDA margin in the coming few years. The company has shown continued gradual improvement in the past several years (from 5.7% in FY13 to 10.6% in Q1FY24), and we expect this traction to continue in the foreseeable future. Anticipate marginal improvement to continue QoQ in FY24e.  The margin to scale up from 10.1% in FY23 to 11.4% by FY25e as the company to enjoy operating leverage benefits, along with premiumization, improving export sales and cost improvement jo

Steel Strips Wheels Ltd | Q1FY24 Result Update | Flying higher, undervalued. Maintain BUY! CMP: Rs 209 | Target Price: Rs 262 | Upside: 26% | Rating: Buy Revenues matched estimates, while EBITDA Margin was slightly below estimates on account of investment in employees and has chosen strategic approach to gain market share in exports by sacrificing some margins. On the outlook, Steel Strips Wheels Ltd (SSWL) to report Rs 45-47bn revenue in FY24 with improvement in EBITDA Margin as the contribution from high margin businesses viz. Exports and Alloy wheels are increasing. This, along with operating leverage benefits. Apart from alloys/exports, positive triggers ahead are 1) Getting the largest OEM in alloys client list in a few months, 2) Redler JV in a few week’s time, 3) AMW acquisition soon, 4) Alloys expansion to complete and 5) entering into new avenue i.e. Casting business. We maintain BUY rating with a revised target price of Rs 262 per share as a revival in exports and the alloy wheels order book is full till FY26 are the biggest turnaround triggers ahead. Export and alloys to lift revenues and margins  Exports being a high margin business jumped by more than 100% in Q1FY24. SSWL started alloy wheels exports as well and expect the current traction to take export value to Rs 6.45bn in FY24e (+120% jump YoY).  Anti-dumping duty on Vietnam, which is one of the biggest competitor for SSWL is beneficial for the company. SSWL has taken advantage by taking a strategic decision to gain market share by sacrificing some margins. It’s a mid-term positive move.  Alloy wheels is having the 2nd highest margin business in SSWL. Its expansion to complete in the next few months, which will increase the capacity from 3.0mn to 4.5mn. The alloys order book is full till FY26e and we anticipate ~17% CAGR FY23-FY25e in value.  SSWL to get India’s largest PV OEM in its client list in the next few months, which can give huge volumes plus alloys exports are also showing strong traction should benefit margin. AMW acquisition and new businesses are on the cards  The court has secured the order, and the announcement for the same can happen anytime. SSWL already paid Rs 200mn in advance, and has sufficient cash to pay the balance Rs 1.3bn.  It will add ~7mn steel wheels capacity, which will increase SSWL’s steel wheels capacity by 35%. Hence, the company doesn’t need to incur any capex on steel wheels for the next 7-8 years.  Redler JV signing is on cards, it can happen soon. Additionally, SSWL is entering into Casting business mostly steering knuckles, which is a high margin business. Strong cash flows to support acquisition, capex & debt repayment  SSWL has been generating strong cash flows, this traction should continue. It has been reducing its debt level consistently since last few years, and the D/E ratio stands at 0.6x in FY23. We anticipate D/E to come down to 0.3x by FY25e.  We expect a further cash flow generation ahead will be support to pay, 1) its debt level with increased intensity in the coming years, 2) for its capex requirements, and 3) for AMW acquisition. Growth drivers intact, valuation inexpensive  SSWL is trading very attractively at 5.6x FY25e EBITDA & PE 9.3x FY25e EPS. The company is a clear re-rating candidate due to aggressive growth plans ahead, mix is trending towards high margin businesses and a superior return profile.  We have valued the company by assigning EV/EBITDA multiple of 7.0x (increased from 5.5x) to FY25e EBITDA of ~Rs 5.82bn to arrive at a fair value of Rs 262 per share.  Increased multiple due to revival in exports and strong traction in alloys. We have maintained topline estimates, but reduced EPS by 5%/9% in FY24/FY25 respectively on account of curtailment in EBITDA Margin due to strategic decision for the exports business & increased investments in employees.

Suprajit Engineering Ltd| Q4FY23 Result Update | LDC turned around, new products showing strong traction. Accumulate! CMP: Rs 389 | Target Price: Rs 445 | Upside: 14.2% | Rating: Accumulate Revenue/EBITDA matched near our estimates, while EBITDA Margin was healthy & above estimates. PAT was lower than estimates mainly due to lower than expected other income (MTM) & higher effective tax rate. FY24 outlook is promising, and the next few years looks to be in a good shape. While, some muted performance (temporarily) anticipated for the non-auto division due to global macro challenges. The margin improvement journey will continue and a band of 12-14% maintained for FY24. Suprajit has been working with all top five 2W EV OEMs for new products, and is confident that new products to add substantial growth in the next five years. Suprajit's fair value comes to Rs 445 per share (21x FY25e EPS), recommend ACCUMULATE. Healthy order book & winning share in core businesses  Auto cables: Suprajit has been winning new orders from domestic & export clients, and aftermarket traction continues to remain healthy. This is despite flattish 2W OEM demand, and mostly order wins is from high realization PV cables in India & globally.  Non-Auto: Margin performance was exceptionally well as a change in the strategy of making in Unit 9 & exporting globally is a success. A mid-single digit volume growth is anticipated as people in the US are cutting discretionary spends, however, order pipeline is healthy.  Phoenix: Strong outlook for domestic, exports & aftermarket with expectation of near double-digit margin in the coming years. Winding down ‘Trifa' should curtail a lot of costs & benefit will be visible in the mid-to-long term. LDC and new products to drive mid-to-long term growth  LDC: The revenue & margin improvement trajectory is clearly visible, we believe it will be able to achieve its guided $100mn revenue in FY24 with high single digit EBITDA Margin.  New products: Working with all top five 2W OEMs for its high realization new products, the response is commendable and orders in hand should drive growth in the mid-term. It will provide new avenues of growth and support Suprajit to diversify & grow beyond cables. The realization & margins are much higher than a normal cable. Reasonably attractive valuations, recommend ACCUMULATE!  Suprajit’s historic year-on-year outperformance is noticeable. We believe apart from strong growth visibility in its traditional business, LDC’s global reach and new products from Suprajit Technical Centre will be new growth drivers for mid-to-long term.  Its trading at 18.4x FY25 estimated EPS of Rs 21.2. Assigned 21x to FY25e EPS to arrive at a fair value of Rs 445 per share. Due to recent run-up in the stock price, the stock is downgraded from BUY to ACCUMULATE. More or less our estimates remain the same.

Steel Strips Wheels Ltd | Q4FY23 Result Update | Combination of high margin businesses to drive earnings ahead! CMP: Rs 149 | Target Price: Rs 224 | Upside: 50% | Rating: Buy The result is slightly below our estimates, major negative hit seen in RMC, which inched-up by 267bps QoQ to 65.7% of revenue, while cost reduction efforts are clearly visible on other line items. 1) Input cost passed-on, 2) subdued mix due lower alloy wheel sales, and 3) within exports, there was higher sales of low margin products, led to a decline in the EBITDA Margin QoQ. The outlook for higher margin businesses viz. Alloys, Exports & CV is healthy, should support in margin improvement going ahead. Exports started showing much better QoQ numbers, aims to clock Rs 5-6bn in FY24 (vs. Rs 2.9bn in FY23). It reduced total debt by 18% in FY23, healthy CF generation entails a continuous reduction in it, should support earnings further. Alloy wheels order book is full, capacity expansion is on track, this along with a lower effective tax rate is positive for the PAT growth. Addition of new products viz. Controllers & Motors for EV business could re-rate the stock. We continue to remain positive and maintain BUY rating for the target price of Rs 224 per share. Export, Alloys & CVs to drive volumes growth o We have factored in volume growth of ~8% FY23-FY25e, and ~3% improvement in the realization on account of the expectation of higher sales from alloy wheels & exports. o Exports revenue dropped by ~65% to Rs 2.9bn in FY23, the company aims to near double export value sales in FY24 due to the combination of a low base, good number of RFQs, & improvement in global markets. o In Q4, strong growth QoQ was clearly visible in exports, however due to uncertainty & competition, estimated ~16% CAGR in export sales between FY23-FY25e. o SSWL is the market leader in MHCV steel wheels should benefit as we continue to remain positive on the CV cycle for few years. Anticipated ~10% CAGR volume growth in it FY23-25e. Margin improvement is inevitable due to improving mix o The combination of its high margin businesses viz. alloy wheels, CVs and exports contribution is inching-up. This, along with benefits of soft commodity prices & operating leverage to lift-up EBITDA margin in the coming two years. o Although, the potential for margin improvement holds very strong, however we anticipate a gradual expansion in EBITDA margin from 11.0% in FY23 to 12.0% by FY25e. Growth drivers intact, valuation inexpensive o SSWL is trading very attractively at 3.5x FY25e EBITDA & PE 6.1x FY25e EPS. The company is a clear re-rating candidate due to aggressive growth plans ahead, mix is trending towards high margin businesses and a superior return profile. o We have valued the company by assigning EV/EBITDA multiple of 5.5x (reduced from 6.0x) to FY25e EBITDA of ~Rs 6.0bn to arrive at a fair value of Rs 224 per share. Marginally tweaked estimates post interacting with the management & reduced multiple a bit due to uncertainty.

Ashok Leyland Ltd | Q4FY23 Result Update | Prolonged CV cycle on cards, conservatively projected, maintain BUY! CMP: Rs 150 | Target Price: Rs 195 | Upside: 30.0% | Rating: Buy Q4FY23 Revenue, EBITDA matched our estimates, Adj. PAT was higher than estimates by ~15% due to lower effective tax rate vs. expectation. It reported the highest ever Volume/Revenue/EBITDA per unit, while adjusted PAT was at 20 quarters high. We continue to remain positive on Ashok Leyland as it has been gaining market share led by AVTR range, Dost & Bada Dost success, expansion in non-south regions, product intervention and revival in the buses segment. We expect this traction to continue in the coming two years, and in addition exports, single fleet owners & scrappage should push growth higher. Achieved EBITDA Margin of 11% in Q4FY23, aspiration is the mid-teens in the coming years. We have conservatively estimated near industry in-line volume growth for Ashok Leyland in FY24/FY25 and sustaining EBITDA Margin in the range of 11.0-11.3% level in FY24/FY25 respectively is very much doable at ~85%+ utilization. Maintained BUY recommendation with a fair value of Rs 195 per share. Prolonged CV cycle on cards  Last two previous CV cycles were impacted due to pandemic in FY20 and earlier in FY13/FY14 as the previous government was little slow in taking the required actions for the economy.  At present, India is in good hands, the economy should grow at a consistent ~6% in the foreseeable future. The CV growth is linked to the GDP & require to run the economy.  Hence, we trust that this CV cycle is longish one, last seen was between FY14-FY19 witnessed a CAGR of 14% during that period.  In addition, exports, single fleet owners and scrappage for the government’s owned vehicles should push-up the growth higher in the coming two years. Traction on market share gains is clear in the foreseeable future  We have conservatively projected Domestic/Exports volumes to grow at CAGR 8%/5% respectively FY23-FY25e to touch total volumes ~224K units by FY25.  The company has been gaining market share driven by its AVTR range in MHCVs and Dost/Bada Dost in LCV range, plus increasing its reach further in North & East regions.  Expect continued traction in the coming years as it is filling product gaps and the full benefit of network expansion is yet to come. Higher growth in buses segment and better placed in fast growing commercial trucks in the ongoing upcycle should continue to benefit higher than its peers.  LCV is very large sub-segment (60-65%) in the CV industry, where the company has less presence, however, plans to launch products in it, should benefit.  Ashok Leyland’s domestic market share increased from 16.4% in FY22 to 18.8% in FY23, this is mainly driven by outperformance in the MHCV segment, where its share improved by 477bps YoY to 31.8% for the same period. Similarly, export market share in the total CV segment inched-up by 242bps YoY to 14.4% in FY23. Margin maintained at 11.0-11.3% level as commodities is the black-box  At 85%+ utilization, it will get higher operating leverage. In addition, volumes to tilt more towards MHCVs, the expectation of lower discounts, internal cost reduction efforts and higher margin exports revival should push-up the overall margins.  But, as commodities remain the black-box, we remained conservative in keeping the EBITDA margin in the range of 11%/11.3% level for FY24/FY25 respectively. Optimistic on the EV business  Switch Mobility has 2,500 eBus orders in hand, the company will invest Rs 12bn in FY24 for new products development and capacity expansion as it is opening a new plant in Spain. The Bada Dost electric version launch should happen soon.  It has been looking for the right strategic partner for investment to support growth plans. Outlook and Valuations  Assigned 10x multiple to FY25e EBITDA of ~Rs 50bn and separately valued Hinduja Leyland Finance (1x FY25e BV of R