Bajaj Auto Ltd | Q4FY24 Result Update | Most of the positives factored-in, valuation expensive, maintain SELL! CMP: Rs 9,018 | Target Price: Rs 8,427 | Downside: -6.6% | Rating: SELL Revenue/EBITDA/PAT is higher than our estimates by ~4%/5%/4% respectively in Q4FY24. The beat was largely on the Gross margin side vs. our estimates (healthier by 81bps, received the benefits of soft commodity prices & mix), and better realization (3.6% higher than our estimates) was supportive for the margin. On the guidance, domestic volumes continue to remain healthy, new launches in ICE/EVs including 3Ws & CNG 2W will sustain outperformance in FY25 across segments. Mix, Scale, PLI benefits & operating leverage to improve EBITDA Margin going ahead. Exports improvement is on the cards as markets are gradually recovering. Total volume growth is anticipated at 12.4% CAGR FY24-FY26e to touch ~5.48mn units. Domestic/Exports volume is expected to grow by 11.5%/13.9% respectively. We expect Volumes/Revenue/EBITDA/PAT to grow at a CAGR ~12%/20%/23%/21% respectively FY24-FY26e. Volumes will be driven by continued strong momentum in 2W domestic, gradual recovery in exports, and this is followed by a ramp-up in Chetak and Triumph models. Based on our estimates, the stock is trading expensive at ~23x FY26e EPS of Rs 394. We maintain SELL rating with a revised fair value of Rs 8,427 per share as most of the near term triggers looks to be priced-in. Domestic 2W industry is on uptrend, momentum to sustain, Bajaj to outperform Domestic two-wheeler industry is in the cyclical recovery phase, anticipated to grow in low double-digit in FY25, before it cools-off to high single digit in FY26. As per our on-ground checks, inquiries/walk-ins are healthy, further lifted by wedding season in some parts of the country. Bajaj Auto should able to outperform the industry led by 1) good performance in the 125cc+ portfolio, 2) expectation of the success of upcoming CNG motorcycle which can disrupt the entry-level market, 3) the launch of the Pulsar 400cc is on cards, 4) pick-up in Triumph models, and 5) fast gaining share in e2W driven by network expansion & new model launches ahead. We have projected domestic two-wheeler volumes to report 12.0% CAGR FY24-FY26e to touch ~2.8mn units by FY26. It improved market share in the total 2W industry by 109bps YoY to 12.4% in FY24 due to superior show of the 125cc+ portfolio and excellent performance of Chetak (retail share improved from ~4% in FY23 to ~11% in FY24). Exports 2Ws should gradually get better, but still away from FY22 peak Currency depreciation, FX availability and high inflation remain key concerns specially in the African countries and South Asian region, while recovery is visible in other markets. However, we trust that the worst seems to be behind with the expectation of continued QoQ recovery on cards. YoY growth will be higher on a low base of last year. Bajaj Auto is expanding in newer markets viz. Brazil and Europe to diversify, de-risk & growth. This, along with Triumph’s exports pick-up will be supportive in growing 2W export volumes. We have factored in monthly ~145K 2W exports in FY25 vs. ~123K units in FY24, and will touch ~160K units in FY26, but still far away from its peak of ~183K units clocked in FY22. Electric vehicles, Three-wheelers, Triumph and Quadricycle Chetak is well accepted by customers, the company gained share in FY24 and anticipate to continue this trend driven by new launches/refreshers ahead along with expansion of touch points (from 200 to 600 showrooms in H1FY25). We have projected Chetak will be able to increase sales from 9.6K units per month in FY24 to 15K/20K per month in FY25/FY26 respectively. On three-wheelers, expect 3W industry to see mid-to-single digit growth on a high base, while Bajaj’s 3W should outperform led by eAutos expansion and CNG network increase. The company targets to replace e-ricks in North/East/Central India w

Swaraj Engines Ltd | Q4FY24 Result Update | Extensively outperformed industry, Accumulate! CMP: Rs 2,396 | Target Price: Rs 2,713 | Upside: 13.2% | Rating: ACCUMULATE Swaraj Engines Ltd.’s (SWE) FY24 ended on a strong note and Q4 numbers are much stronger vs. estimates, driven by some market share gains, and shift of business from Kirloskar may have played its part. This, along with softer input costs supported in getting margins better YoY. The company continued its good performance and reported 8th successive quarter of engine sales growth (YoY). Considering high-capacity utilization and future demand scenario, the company plans to increase the capacity from 150K units annually to 195K units through internal accruals. Recent on ground dealers check suggests that tractors are on the edge of picking-up driven by expectation of better monsoon ahead & subsidies. We anticipate a gradual possible shift of business from Kirloskar to SWE in the coming years. The company’s sales outperformance vs. the industry should continue going forward as ‘Swaraj’ is known among quality names in the industry & higher flow of business due to shift will keep giving additional volumes. Considering sound fundamentals, consistent dividends and possible increase in the business makes SWE a good investment avenue. We have increased multiple from 18x to 20x considering the shift from Kirloskar to Swaraj Engine has already started, maintained Accumulate rating with a revised fair value of Rs 2,713 per share (20x FY26e EPS of Rs 136). Q4FY24 result analysis­ – strong numbers, widely outperformed industry Q4FY24 revenue, EBITDA, and PAT exceeded our estimates by 25%, 42%, and 41%, respectively, driven by market share gains and business migration from Kirloskar. Despite industry degrowth of 18.1%, SWE sold 35,344 engines, marking a 1.4% YoY growth, maintaining its outperformance. However, realization dropped by 3.8% YoY to ~Rs 99K per unit due to metal price corrections. EBITDA Margin stood at 13.7%, surpassing our estimates by 165bps. This was primarily due to a Gross Margin improvement of around 108bps YoY to ~21.4%, driven by softer input costs. However, this was offset by an increase in Other Expenses by ~70bps YoY to around 4.9%. On-ground checks indicating change in the body language of tractor dealers Despite ongoing challenges in the tractor market on a YoY basis, such as lower crop production and gradual increases in tractor prices, recent indications show a more positive outlook. Tractor dealers have displayed improved confidence recently, likely due to expectations of above-normal monsoon this year. Consequently, earlier negative YoY growth guidance for the ongoing peak season has been revised to flat YoY growth. Anticipated growth in the tractor market will be fuelled by subsidies, with rural areas expected to see a resurgence if the 2024 rainfall is normal and well-distributed across regions. Stable crop prices and discounts, coupled with improving inventory levels at the start of this peak season (from Holi through June), further support this optimistic outlook. Proved its outperformance over the long period, confident of sustaining the same Domestic tractor industry posted 3.2% CAGR FY14-FY24 vs. Swaraj's engine sales of 6.5% CAGR & revenue CAGR of 8.9% for the same period. We anticipate the continued outperformance of Swaraj due to its recognized quality, supported by the observed shift in business from Kirloskar to Swaraj following Kirloskar's exit from Swaraj Engines, leading to increased volumes compared to the previous year. Outlook and Valuations Tweaked estimates marginally, however increased multiple from 18x to 20x considering the shift from Kirloskar to Swaraj Engine has already started, maintained Accumulate rating with a revised fair value of Rs 2,713 per share (20x FY26e EPS of Rs 136). Considering the promising future demand, Swaraj Engines plans to boost engine capacity from

Divi’s Laboratories Ltd | Q3FY24 Result Update | Synthesis: Fuelling Future Growth CMP: Rs 3,651 | Target Price: Rs 4,372 | Upside: 20% | Rating: BUY Divi’s lab result were below our estimates. Revenue witnessed growth of 8.6% YoY but has seen decline of 2.8% QoQ to Rs. 18,550 mn. The YoY increase primarily stemmed from a noteworthy 25% surge in Custom Synthesis business, counterbalanced by a -3% decline in the generic business and a 2% upturn in Nutraceuticals. Due to favourable product mix and softening of raw material prices the gross margin improved by ~397 bps YoY and ~313bps QoQ to 60.7%. The Custom Synthesis business is experiencing growth, especially with two major projects from prominent pharmaceutical companies transitioning into full-scale production. The contribution from synthesis is expected to notably increase from 45% in FY24E to 50% in FY26E. EBITDA increased 19.6% YoY and 2.1% QoQ to Rs.4,890 Mn due to higher gross profit. Due to slower than expected increase API segment and subdued growth in Nutraceuticals business, we cut our growth estimates of Revenue/EBITDA/PAT by 11%/30%/32% for FY25E. Due to red sea situation, logistics cost is expected to rise in coming quarters, along with commissioning cost of Kakinada plant. Custom Synthesis – For Q3FY24, Divi’s 87% of the revenue is from export business, where the export to regulated markets contributed 71% of the total export revenue. The custom synthesis segment, which is a high margin business, accounted for 46% of total revenue, witnessed growth of 25% YoY and 12% QoQ to Rs.8,533 mn. This segment is expected to witness CAGR growth of 36% from FY23-FY26E on the back of launch of two fast track projects. The company is actively engaged in producing peptide building blocks crucial for the development of new anti-diabetic and anti-obesity drugs. The anticipated peak sales for each drug are approx. USD 25 Bn. Divi's strategic focus lies in building a specialized portfolio, leveraging its capex strength. The company is continuously advancing its proficiency in emerging technologies, including peptides, high-potent conjugate drugs, and contrast media products, Divis is also proactively enhancing its commercial capabilities to capitalize on upcoming business opportunities. Generic – The generic segment accounted for 46% of total revenue. Revenues degrew by 3% and 9.8% QoQ to Rs 8,487 mn. The API business has witnessed pricing pressure in old molecules, however has witnessed strong volume growth. However, the pricing situation is expected to get normalize going ahead. Strong growth is expected from peptide and sartans opportunities. We expect revenue CAGR of 19% from FY24E-FY26E from this segment. Nutraceuticals – The growth in this segment remained subdued with revenue at Rs. 1,530 Mn. Margin – Favourable product mix led and low RM costs led to increase in gross margin by 397 bps YoY and 313 bps QoQ to 60.7%. The margins are expected to improve going forward as the synthesis business picks up. The company is also benefitting from softening of raw material prices. Currently, its facilities are operating at 70-80% utilization. Post commercialization of Kakinada plant, several capacities will be free which will help in Debottlenecking. Valuation: Divi excels in tailoring synthesis processes for specific segments, showcasing its expertise in custom synthesis. As a result, Divi is strategically poised to capitalize on emerging opportunities presented by recently off-patent molecules. Company is seeing softening of RM costs and higher revenues from synthesis business will further improve the margins. We value the stock based on SOTP valuation strategy and arrive at a target price of Rs. 4,372. Buy.

Lumax Auto Technologies Ltd | Q3FY24 Result Update | Impressive operational performance & robust guidance, Strong BUY! CMP: Rs 460 | Target Price: Rs 578 | Upside: 25.7% | Rating: BUY Lumax Auto Technologies Ltd (LATL) posted highest Consolidated Revenue/EBITDA/PAT in Q3FY24 driven by exceptional performance at IAC India and Standalone business. The robust outlook given: 1) Consolidated EBITDA Margin will further improve & IAC’s 18% margin is sustainable, 2) Total order book of Rs 11bn, faster order execution for new JVs to start from next fiscal, 3) Lower effective tax rate of 25-26%, 4) Consolidated revenue to grow by 20%, 5) Standalone to grow at double-digit with further improvement in margins. 6) Generating strong CFs, the debt will reduce further. Our belief is strong that LATL is a robust re-rating candidate, supported by its collaboration with eight well-established global partners, a track record of well-executed past financial performance, plans for debt reduction, and a reputation for clean management. In our view, the eight international partners represent hidden gems, providing strong support to LATL with their robust technical capabilities. Some of these partners have proven to be valuable assets, evident in their impressive past performance and business wins. Additionally, the five emerging subsidiaries are poised for significant growth. We maintain BUY rating with a revised fair value of Rs 578 per share (maintained 16x FY26e EPS). Upgraded EPS led by strong execution in Q3, inclusion of Lumax Ancillary Ltd and robust guidance ahead. Strongly recommend BUY! Q3FY24 result analysis – Impressive operational performance! • LATL reported highest Consolidated Revenue/EBITDA/PAT in Q3FY24. • Revenue is lower than our estimates by ~6% to Rs 7,325mn, however EBITDA/PAT numbers surpassed expectations by 7.1%/7.5% respectively. • This is driven by superior improvement in the EBITDA Margin at 14.5% - the highest ever reported in any quarter. • Consolidated EBITDA Margin exceeded our projection by 181bps majorly led by exceptional performance at IAC India and Standalone business. Both the business segments posted its best EBITDA Margin. • Standalone PAT was higher than our estimates by ~5% to Rs 180mn as it showcased on of the best EBITDA Margin at ~9.4%. • Margin improvement was largely because Bajaj/HMSI & other key customers posted high double-digit growth & increase in the higher margin Aftermarket. Key growth drivers ahead • IAC India – the acquisition strengthened LATL’s plastics business, existing clients along with expected new business from anchor clients to support growth, joint sourcing & scale to improve margins. In talks with TaMo for business. • Lumax Mannoh – gradual shifting to high margin automatic gear shifters & further export opportunities from the JV partner bodes well, • Lumax Cornaglia – anchor client TaMo outperforming, along with other clients, coupled with localization, & the introduction of Plastic fuel product to drive business, • Standalone – increasing contribution of higher margin aftermarket, LED and the anticipated rebound in Bajaj’s export to push growth ahead, • Emerging subsidiaries – With a robust order book featuring promising products like Sensors, Telematics, Antennas, among others., the emerging subsidiaries are poised for higher growth in the upcoming years starting FY25. They currently hold strong orders amounting to ~Rs 3bn+, and the potential market size is estimated to be around Rs 93bn. The next partnership is anticipated to focus on pure-play EV components, in our view. Expect higher growth in financials • Financials set to fly higher with the expected Adj. EPS growth of ~35% CAGR FY23-FY26e driven by high margin IAC India & Automatic gear shifters, a rising contribution from emerging subsidiaries, reinforced by the Aftermarket, a rebound in key clients' business momentum, and a reduction in finance costs due to debt repayment. • We have inc

Eicher Motors Ltd| Q3FY24 Result Update | Outperformance continued, happy dealers, attractive valuation, Accumulate! CMP: Rs 3,857 | Target Price: Rs 4,301 | Upside: 11.5% | Rating: Accumulate Q3FY24 Revenue/EBITDA/PAT is higher than estimates by ~3%/3%/7% respectively. Reported highest quarterly Revenue/EBITDA/EBITDA per unit. Margins to see gradual improvement due to new products, increasing exports contribution, no major pain visible in commodities, along with VAVE & scale benefits. New launches to support volume growth, on-ground check reveals ‘happy dealers’. In our view, RE will be able to deal with the competition due to the combination of 1) healthy new product pipeline, 2) recent launches Himalayan, Bullet, Super Meteor received an admirable response, 3) reach & smart expansion of the network, 4) eight strong existing brands & counting, 5) service network, and 6) 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 (incorporated). Assigned 23x multiple to RE business & 10x to VECV FY26e EBITDA. Broadly maintained estimates. Recommend Accumulate with a revised fair value of Rs 4,301 apiece. Q3FY24 result analysis – Higher than expectations • Revenue/EBITDA/PAT numbers are higher than our estimates by 3%/3%/7% respectively. It reported highest ever Revenue/EBITDA/EBITDA per unit. • Realization improvement is driven majorly by new launches/refreshers, offset by exports degrowth (Exports as % of total volumes dropped by 209bps QoQ to 6.4%). • PAT is higher driven by better operational performance. YoY numbers on all fronts looks healthy despite lower volume growth. • Rs 200mn was One-off expenses owing to new launches, however this should continue as RE has a good launch pipeline. VECV PAT of ~Rs 1.1bn matched our estimates. • The company has been surprising positively back-to-back since last five quarters with better than expected operational performance. RE has strong positioning, dealers are happy! • Royal Enfield dealers are not witnessing any competition impact, infact inquiries/walkins are better due to the success of recently launched models viz. Super Meteor, Bullet, Himalayan, etc. • The new Bullet now is one of the best selling models. Himalayan demand is extremely strong that after Nov launch, the company increased prices in Jan. • Launched refreshers with new colour variants are attracting a young crowd specially for Hunter model. Inventory is under control (15-30 days). • Himalayan, Super Meteor, 650cc twins have a waiting period of 1.5-3 months. Other models are available max within one week due to good supply improvement over the period, while there is no dearth of the demand. Competitors will take 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 (in total 2,007 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, in our view. Estimated ~7% volume CAGR FY25 onwards, realization growth to remain under check • The era of high double-digit growth looks to be over for RE. Projected Domestic/Exports/Total volumes to grow at CAGR 9.5%/-1.5%/8.3% FY23-FY26e. Exports CAGR looks subdued due to ~28% YoY drop anticipated in FY24 (macro challenges). • The total volume growth should remain in mid-single digit from FY25e for Royal Enfield as this time the competition is serious (incorporated in slow volume growth FY25 onwards). • Royal Enfield was earlier enjoying strong pricing power, however that will come u

Hero MotoCorp Ltd | Q3FY24 Result Update | With improved volumes & growth outlook, the new CEO is turning tables! CMP: Rs 4,909 | Target Price: Rs 5,400 | Upside: 10.0% | Rating: Accumulate Revenue/EBITDA/PAT broadly met our estimates, reported YoY growth of ~21%/47%/51% respectively. With the new CEO on-board, we have started witnessing Hero’s ‘Changing Gears’ strategy with growth remains the core focus and reaching faster to the market to fill product gaps, premiumizing core portfolio, launching eye-catching premium products, revamping distribution, expansion in EVs, strategic collaborations, more products action are on cards ahead, among other steps. These new models are not less than competitors’ products, and is as per customers’ taste. All these strategic direction to not only lift volumes, but also realization & margins starting FY25. The full year effect of these new launches are yet to see in the next fiscal, along with an expected rebound in exports, and rural already showing initial strong traction. We anticipate Revenue/EBITDA/Adj. PAT to grow at CAGR ~16%/25%/29% respectively FY23-FY26e. Two wheelers finally gaining ground, recent premium launches have been well acclaimed by customers/dealers, and a new CEO has a clear & sharper focus on growth with portfolio expansion. This, along with compelling valuations are some core reasons suggesting to Accumulate the stock. We have rollover from Sept 2025 to Mar 2026, maintain 16x multiple, and valued Fincorp & Ather separately to arrive at a revised fair value of Rs 5,400 per share. Tweaked estimates marginally looking at the strong commentary & launch pipeline ahead. Maintain Accumulate rating. Q3FY24 result analysis – largely met estimates • Revenue/EBITDA/PAT was more or less in-line with our estimates. • Topline growth of ~21% YoY to ~Rs 97.2bn in Q3FY24 was largely led by ~18% YoY volume growth to ~1.46mn units, and realization growth of ~3% YoY to Rs 66,604 per unit. • The realization growth was flattish QoQ despite higher discounts during festivals. • Gross margin improved by 208bps YoY to 32.7% was driven by mix, price increases, & softer commodity prices. • EBITDA Margin inched-up by 250bps YoY to 14.0% supported by gross margin improvement, scale benefits & LEAP program benefits. • PAT was higher by 51% YoY to ~Rs 10.7bn driven by superior operational performance, and higher Other income (+~32% YoY to ~Rs 2.42bn). New CEO filling white spaces faster, sharper focused on growth • Post Mr. Niranjan Gupta taking over the position of the CEO, Hero MotoCorp has been filling white spaces viz. Premium, Exports, EVs & Scooters on fire fighting mode. • Not only this, distribution revamp, targeted sales push, launching products as per customers taste has started showing desired results. • Hero MotoCorp is now sharper focused on growth, reaching faster to the market to fill product gaps. What’s more ahead…? • Premium, Electric vehicles and Digital remain three core areas of focus. • To increase X440 & Karizma’s combined capacity soon to 10K units/month from existing 6K units/month. Bookings for X440 & Karizma are 25K & 13.6K units respectively. • On eScooters, Hero will launch four new products in FY25 serving premium, mainstream and mass market customers. The mid-term plan is to enter global markets, and to improve performance & reduce cost. • The plan is to launch a few eMotorcycles (some with Zero Motorcycle company) from FY26 onwards serving segments viz. Mid, Mid-premium, Premium and Performance motorcycles. Volumes, Realization and Margins started trending higher • The new CEO’s focus is around ‘growth, growth & growth’ with new multiple product launches filling gaps, along with revamping distribution, growing the core, gaining share in the 125cc, more launches ahead in the scooters and EVs should support volumes growth in the coming few years. • New models X440, Karizma, Xtreme 125, Maveric is already taking required attentions. Xpul

Mayur Uniquoters Ltd | Q3FY24 Result Update | Decent earnings growth visible FY25 onwards, BUY! CMP: Rs 531 | Target Price: Rs 656 | Upside: 23.5% | Rating: Buy Amidst some challenges in the US auto market and BIS related issues in the domestic footwear business, Mayur Uniquoters came out with a sequential flattish performance, however Revenue/EBITDA/Adj. PAT was up ~3%/~13%/~19% on YoY basis. With PVC price corrections and stabilization, the company further improved its margin performance, now nearing ~22%. The management highlighted many growth levers especially at auto exports fronts where they have got good order indication for the next several years. With Chinese imports along with the PU issues continues, the company is in talks with several brands to propel this business. We rolled over our valuation multiple to FY26E EPS and maintain BUY rating on Mayur Uniquoters with a slightly upgraded TP of Rs 656, as the company is expected to get traction in higher margin businesses. Mayur is set to get good amount of new businesses from Ford, Mercedes and BMW in coming years and already in talks with players like Stellantis. Besides getting into new products like marine related leathers, they have got some initial success in their B2C business efforts. 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 stronger performance from FY25 onwards. A sequential flattish quarter, better performance FY25 onwards  Standalone revenue came in at Rs 1,746mn, a small growth of 2.8% YoY / down 3.8% QoQ, lower than our estimates. BIS related issues in the footwear market, challenges in the US auto and new airbag norms hurt the performance.  The management highlighted that FY25 onwards, a good growth should start and FY26 performance will be very strong. Margin has been stabilized above 20%, now nearing ~22%  EBITDA stood at Rs 378mn, with a margin of 21.6% during the quarter compared to 19.7% in Q3FY23 and 20.7% in Q2FY24. Decline in the PVC prices is helping at Gross margin level and the company was able to further improve margins.  On the consolidated level in Q3FY24, the company posted sales of Rs 1,783mn, up 0.2% YoY and PAT of ~Rs 272mn, up 2.8% YoY. FY25 onwards stronger performance should be visible  The management continues to indicate that export OEMs business to multiply when businesses from new clients reach to guided levels by clients.  Start of BMW business and ramp up of Mercedes business will boost both sales & margins going forward. As per the management, BMW business will start kicking in Q1FY25 onwards. Outlook and Valuations  Besides working on high margin export business, the management is focused on the increasing presence at retail front. They are onboarding dealers across India to increase brand visibility.  The management is confident of double-digit growth FY25 onwards.  More-or-less we have maintained both FY25e and FY26e earnings estimates as better margin estimates offset some cut at the sales levels.  We have rolled over our valuation multiple to FY26E EPS (from Sept 2025). Considering BS strength and consistent handsome payouts to shareholders, we value Mayur at 18x FY26e earnings to arrive at fair value of Rs 656 apiece and maintain BUY.

Ashok Leyland Ltd | Q3FY24 Result Update | Excellent operational performance, factored in temporary softness, maintain BUY! CMP: Rs 179 | Target Price: Rs 227 | Upside: 26.8% | Rating: Buy The financial results for Q3FY24 exceeded our projections, fueled by impressive margins and achieving the highest EBITDA per unit on record. We've factored in a temporary dip in demand due to the elevated base in Q4FY24 and uncertainties surrounding the upcoming national elections in Q1FY25. Nevertheless, we consider this softness temporary, as our on-ground assessments indicate robust levels of inquiries, particularly for models related to infrastructure/construction and buses. Ashok Leyland is poised to outperform the industry for several reasons: Firstly, expanding network into less penetrated regions. Secondly, introducing new products in the large SCV market. Thirdly, secured substantial orders for bus execution. Lastly, intensifying efforts to scale up exports. Having already achieved a commendable 12% EBITDA margin in Q3FY24 despite lower volumes, we anticipate further improvement in Q4 driven by scale, product mix optimization, and favorable commodity price trends, with a projected margin of 12.5%. Looking ahead, the company aims for a mid-teen EBITDA margin in the medium term. We are confident in the overall health owing to macroeconomic parameters, as evidenced by positive feedback from dealers indicating satisfaction at the grassroots level. Coupled with expectations of a stable government, these factors bode well for an extended upcycle in the commercial vehicle sector this time around. We rollover estimates from Sept 2025 to Mar 2026, and maintain BUY rating with a revised fair value of Rs 227 per share. Q3FY24 result analysis – superior operational performance!  Revenue/EBITDA/Adj. PAT is higher by ~4%/19%/22% respectively in Q3FY24. This is on the back of higher than expected realization at ~Rs 1,963K (+3.6% vs. our est.), along with increased contribution from Non-CV revenue.  QoQ volumes are lower owing to state elections in a few Indian states. Despite lower contribution of MHCVs by ~200bps to ~62% in Q3FY24, EBITDA Margin improved QoQ & touched best ever in this ongoing upcycle.  EBITDA per unit at ~Rs 236K is the best ever in the history driven by softer input costs, internal savings & mix. The benefits are majorly visible in lower RMC as % of revenue (dropped by 130bps QoQ to 72.2%) Built-in temporary demand softness, on-ground inquiry levels are healthy  Q4FY24 volumes projected to degrew by ~15% YoY due to high base of last year owing to pre-buying ahead of BS6 2.0 implementation in Q4FY23, expect near flattish volumes in Q1FY25 due to uncertainty before national elections, and a sharp recovery post elections.  Dealers indicating that the CV market is better in February as compared to January, inquiry levels are healthy, expect March to be even better.  Mostly models related to the infrastsructure, construction has robust demand, followed by eCommerce and local transportation. ILCV, Tippers, MHCV demand is reasonably good, but the SCV segment is soft due to price increase impact, and fleet operators upgrading.  Heavy discounts apply mainly to bulk purchases, but the overall market is stable. Inventory levels are normal, loan processes are smooth, and freight rates remain steady. Dealers expect Q4 to be flat despite last year's high base and are optimistic about the year ahead. Projected conservative volumes ahead, the margin improvement journey to continue  Expect total volumes to reach around 189K units in FY24, with subsequent growth of 7.4% and 6.0% in FY25 and FY26 respectively.  Volume expansion will be led by 1) Successful order fulfillment in the bus segment, 2) Sustained demand for MHCVs fueled by infrastructure and construction projects, 3) Expansion into less explored markets in North, East, and Central regions, 4) Introduction of new products, particularly in the LCV/SCV s

Maruti Suzuki India Ltd | Q3FY24 Result Update | SUVs, Exports & New launches/refreshers to drive volumes, Attractively trading! CMP: Rs 10,183 | Target Price: Rs 12,452 | Upside: 22.3% | Rating: Buy Missed expectations largely due to the lower than expected realization (higher discounts led by festivals & stock clearance), and higher than expected RMC. Our long-term view on Maruti Suzuki remains positive as the company is committed to launch 10 new models, including six EVs (refreshers are additional) by FY31 with 4mn units capacity, ~800K exports & backward integration/localization in EVs with the support of Suzuki Corp. All these steps are positive to gain market share & remain Numero uno. We strongly believe there is a good value in the company despite projecting judicious volumes (~6% CAGR FY23-FY26e) & margin (11.6%-12.1% between FY24-FY26e) looking at continued affordability challenges in the entry level cars. New models/refreshers to drive volume growth ahead, margin improvement on cards. We have tweaked our assumptions factoring in lower than expected Q3 performance, and hence our standalone EPS curtailed down marginally by ~5%/6%/6% for FY24/FY25/FY26 respectively. Roll-over from Sept 2025 to Mar 2026, maintained 25x multiple to arrive at a revised fair value of Rs 12,452 apiece. Trading at an eye-catching valuation of ~20x FY26e EPS. Q3FY24 result analysis – Missed due to higher than expected discounts & RMC • Revenue/EBITDA/PAT was lower than our estimates by ~3%/10%/8% respectively in Q3FY24. The miss was largely on account of lower than expected realization & higher than expected RMC. • Realization dropped QoQ by 1% to Rs 6,64,570 per unit with a clear intention to clear-off inventory specially in the entry level segment, and festival discounts. • EBITDA Margin was lower by 83bps to 11.7% vs. our estimates of 12.6% despite better product & geographic mix. Higher than expected A&P and RM cost along with lower scale benefits are the core reasons for lower margins. Projected single digit volume growth driven by SUVs, Exports, & new launches/refreshers • Volumes to grow by 6.3% CAGR FY23-FY26e, however the company has ambitious growth targets for exports, which is expected to grow at 10% CAGR for the same period. • Using an international distribution network of Suzuki, pickup in African & the ME markets, along with opening up of FTAs for new countries to drive growth in the coming years. • Efforts are clearly visible with export market share touching ~42% in Q3FY24 (impressively gained +625bps YoY & +483bps QoQ share). • In domestic, recently launched SUVs have been gaining traction. This, along with upcoming EV is likely to be successful based on the expected specifications. We expect four new model launches/refreshers in FY24 including two hybrid small cars, 7-seater GV & an electric SUV. • We are also in the view that Maruti is best placed among peers in terms of wider CNG portfolio and Hybrid vehicles. As we believe EVs in cars is going to take higher time due to cost & infrastructure challenges, hence Hybrid is the best option available, where Maruti has an edge & is ahead of its peers. This is keeping Maruti in an advantageous position. • These additional models to drive domestic volume growth by 5.7% CAGR FY23-FY26e. However, despite new launches, we have anticipated zero volume growth in the shrinking ‘Passenger Car’ sub-segment of Maruti Suzuki in FY24 due to continued affordability challenges & change in the consumers taste towards SUVs. Margins are in an upward trajectory due to the mix and stable commodities • Q4FY24 EBITDA Margin is projected at 12.1% as 4th quarter is generally one of the best in a fiscal, discounts will be lower as inventory is at one of the lowest levels, the price increased effective Jan 2024, benefits to accrue for indirect imports & some past soft commodities due settlement is likely to happen. • For the coming years, EBITDA Margin to start inching-up drive

Eicher Motors Ltd | Company Update | VECV entered into a large volume segment with eSCV, Accumulate! CMP: Rs 3,825 | Target Price: Rs 4,288 | Upside: 12.1% | Rating: Accumulate Volvo Eicher Commercial Vehicles (VECV) introduced its foray into the Electric Small Commercial Vehicles (eSCV) segment by presenting its inaugural product at the Bharat Mobility Global Expo 2024. The company aims to commence trials for this model in Q1FY25 and plans to initiate vehicle deliveries from Q4FY25. Notably, VECV is the sole major player without a footprint in the sub-3.5-ton segment with diesel models. Consequently, there will be no internal competition, and any additional volumes from eSCV would contribute exclusively to the overall volume expansion of VECV in the forthcoming years. The strategy involves consistently introducing new eSCV products within the 2.0 – 3.5-ton segment, aiming to secure a larger market share. The diesel market size in the 2.0 - 3.5-ton segment is substantial, comprising approximately 34% of the total CV segment. Notably, there haven't been any significant Electric Vehicle launches in this particular segment to date. The model has applied for and is eligible for the PLI benefits. Conversely, e-commerce and last-mile logistics entities have outlined definite plans to transition their fleets to EVs in the foreseeable future, presenting an advantageous scenario for VECV, among others. The company has not disclosed crucial details such as technical specifications, pricing, and other essential factors necessary to gauge future volumes. As a result, these aspects have not been factored into our financial assessments. Given the recent surge in the stock price, we are revising our recommendation from BUY to ACCUMULATE, with a revised fair value of Rs 4,288 per share. Rollover from Sept 2025 to Mar 2026, valued Royal Enfield 23x FY26e EPS of Rs 163, and VECV 10x FY26e EBITDA of ~Rs 22.6bn. What is the industry size, and eCommerce target to convert into electric?  The 2.0 - 3.5 tons diesel industry is indeed substantial, with an annual size of approximately 320K units. This segment constitutes around 55% of the total LCV market and about 34% of the overall CV segment. In terms of diesel market share within this segment, M&M holds the leading position with a commanding 61%, followed by Ashok Leyland at 20%, and Tata Motors closely trailing at 19%.  Traction in the electric vehicle market has already begun in the below 2.0 tons segment, with successful operation of vehicles like Tata Ace and Mahindra E-Supro  Companies such as Flipkart, Amazon, Big Basket, & various other eCommerce and logistics players have distinct targets to transition a portion of their fleets to electric vehicles in the upcoming years. Some companies have set comprehensive electrification goals, aiming for complete conversion by the year 2030. Competition in the 2.0 - 3.5 tons electric segment?  Currently, there is a lack of major, credible electric models actively operating on the road. While companies like Switch Mobility and Eka Mobility have showcased their electric vehicle products, actual implementation and on-road deployment are yet to be observed.  VECV stands out as one of the early entrants among large players to introduce an electric version in the 2.0 – 3.5 tons segment, with anticipation of unveiling additional new models in the near future. Furthermore, the company has outlined plans to launch CNG and clean diesel-powered variants of the same vehicle. Outlook and Valuation  We project Royal Enfield’s volume growth will come down to mid-single digit from FY25 onwards from high double-digit it use-to report in pre-covid years. This is largely due to increasing competition and a likely hit in the market share is inevitable.  We have marginally tweaked estimates, reduced EPS by ~3%/2%/1% for FY24/FY25/FY26 respectively.  Roll over from Sept 2025 to Mar 2026 with a revised fair value of Rs 4,288 per share (assigne

SJS Enterprises Ltd | Q3FY24 Result Update | Strong momentum across business segments, Maintain BUY! CMP: Rs 618 | Target Price: Rs 794 | Upside: 28.4% | Rating: Buy Consolidated Revenue/EBITDA/PAT is lower than estimates largely due to soft performance of the WPI subsidiary. Management maintained its guidance of 45% topline growth, and 30% Adjusted PAT growth for FY24. Growth visibility is strong across Standalone/Exotech/WPI as cross selling opportunities exists, exports is gradually getting better, introduction of new products, premiumization, and key OEMs viz. TVS Motor, M&M, HMSI, Tata Motors, Maruti Suzuki, Whirlpool, among others will continue its outperformance. Exotech touched its highest EBITDA Margin despite partly outsourcing, and WPI is getting back to its high margin band of 28%+. We anticipate Revenue/EBITDA/PAT to grow at CAGR ~23%/26%/23% respectively FY23-FY26. Marginally tweaked our estimates for FY24/FY25/FY26, rollover from Sept 2025 to Mar 2026, maintained 20x multiple with an upwards revised fair value of Rs 794 per share. Maintain BUY rating. Q3FY24 result analysis – soft performance from WPI impacted Consolidated numbers  Consolidated Revenue/EBITDA/PAT is lower by ~5%/7%/13% respectively in Q3FY24. This was largely on account of lower than expected numbers from the WPI subsidiary.  Standalone PAT in Q3FY24 at Rs165mn vs est. Rs166mn, nearly matched estimates.  Exotech’s Revenue/EBITDA at Rs390mn/Rs72mn vs. est. of Rs391mn/Rs61mn respectively. Despite some of the Exotech’s capacity is outsourced, its EBITDA Margin improved by 190bps QoQ to 18.4% in Q3FY24.  WPI’s Revenue/EBITDA at Rs330mn/Rs67mn vs. est. Rs381mn/Rs107mn respectively in Q3FY24. EBITDA Margin although improved from 12.4% in Q2FY24 to 20.4% in Q3FY24, but still lower than anticipated 28.0% normal figure.  Other income dropped YoY and QoQ due to lower investment income, and cash flows used to repay the debt. Gross debt in Q2FY24 was Rs837mn, reduced to Rs558mn in Q3FY24. Cash was Rs338.2mn as on 31st Dec 2023. Standalone business – Robust momentum continues  We anticipate Revenue/EBITDA/PAT to grow at CAGR ~15%/15%/20% respectively FY23-FY26e. EBITDA Margin will move higher from 29.2% in FY24e to 29.7% by FY26e.  Growth will be driven by improvement in high margin exports, introduction of ‘Cover glass’ product, premiumization, and further supported by outperformance by its key OEMs viz. TVS Motor, M&M, HMSI, Whirlpool, among others. Exotech – impressive numbers despite partly outsourcing  We have conservatively projected Revenue to grow at CAGR ~11% FY23-FY26e, EBITDA Margin to improve from 14.2% in FY23 to 16.9% in FY26.  Exotech is running at 100% utilization, and started outsourcing to two manufacturers, identified 3rd one due to extremely good orders in hand.  In Q3FY24, despite outsourcing part of the manufacturing, EBITDA Margin was impressive at 18.4% (highest in any quarter) led by scale benefits, mix and lower RMC.  However, we believe annually the sustainable margin is in between 16.5%-17.0% in the foreseeable years ahead. Walter Pack India (WPI) – Niche, winning orders, getting back to the high margin band  We anticipate Revenue to move higher from ~Rs 1.06bn in FY24 to ~Rs 1.65bn in FY26. EBITDA Margin anticipate at 19.2% in FY24 due to one-offs owing to model changeover with key clients and acquisition cost. The margin will move up towards the 28.0% level by FY26.  Its normal EBITDA Margin band is 28-30%, however we have conservatively estimated to touch its lower band level of 28% by FY26.  Growth will outperform far higher than the industry as its in a niche high margin business, winning orders from its key clients Tata Motors and Maruti Suzuki, introducing new products, and clear cross-selling opportunities exists with SJS clients to drive revenue & margins higher in the upcoming years. Outlook and valuations  SJS showcased its outperformance in the past years and vis

Lumax Auto Technologies Ltd | Initiating Coverage | Accumulated hidden gems, on the edge of flying higher! CMP: Rs 365 | Target Price: Rs 481 | Upside: 32% | Rating: BUY Founded in 1981, Lumax Auto Technologies Ltd (LATL) is a prominent member of the Lumax-DK Jain Group. Collaborating with eight international partners, LATL specializes in manufacturing advanced automotive products. The company has demonstrated success in the past through a strategic approach, involving joint ventures with established global players, localizing components to cut costs, and delivering high-quality products that meet international standards to domestic OEMs. On the other hand, LATL has been providing its strong OEM connects to partners along with manufacturing capabilities. This has been the ‘success mantra’ for LATL. In our view, the eight international partners represent hidden gems, providing strong support to LATL with their robust technical capabilities. Some of these partners have proven to be valuable assets, evident in their impressive past performance and business wins. Additionally, the five emerging subsidiaries are poised for significant growth. We initiate coverage with a BUY recommendation on Lumax Auto Technologies Ltd, setting a target price of Rs 481 per share (16x FY26e EPS ~Rs 30). Key growth drivers ahead are: 1. IAC India – the acquisition strengthened LATL’s plastics business, existing clients along with expected new business from anchor clients to support growth, joint sourcing & scale to improve margins, 2. Lumax Mannoh – gradual shifting to high margin automatic gear shifters & further export opportunities from the JV partner bodes well, 3. Lumax Cornaglia – anchor client TaMo outperforming, along with other clients, coupled with localization, & the introduction of Plastic fuel product to drive business, 4. Standalone – increasing contribution of high margin aftermarket, LED and the anticipated rebound in Bajaj’s export rebound to push growth ahead, 5. Emerging subsidiaries – With a robust order book featuring promising products like Sensors, Telematics, Antennas, among others., the emerging subsidiaries are poised for higher growth in the upcoming years starting FY25. They currently hold strong orders amounting to Rs 3.2bn+, and the potential market size is estimated to be around Rs 93bn. The next partnership is anticipated to focus on pure-play EV components, in our view. Financials set to fly higher with expected Adj. EPS growth of ~27% CAGR FY23-FY26e driven by high margin IAC India & Automatic gear shifters, a rising contribution from emerging subsidiaries, reinforced by the Aftermarket, a rebound in key clients' business momentum, and a reduction in finance costs due to debt repayment. Key investment rationales • IAC India – acquisition provides tech, diversify towards PVs, increase content per vehicle & Margins • Lumax Mannoh - high-margin automatic gear shifters, & leveraging export opportunities are key drivers for growth • Lumax Cornaglia – Key clients outperforming, margins only getting better, adding ‘fuel tank’ product • Standalone - high margin Aftermarket & Bajaj Auto to drive growth! • Emerging subsidiaries – Resilient international partners and good orders with strong potential for products to drive growth in the mid-to-long term • Financials – Outperformed industry, ready to boost further! Trading at an eye-catching valuations • LATL is currently trading at an attractive valuation of approximately ~12x the estimated FY26 EPS of Rs 30.1 and an EV/Sales of ~0.6x for the same period. Over the last five years, the company has typically traded at ~14x 1-year forward EPS. Considering a marginal premium, assigned 16x multiple to FY26e EPS, the fair value is assessed at Rs 481 per share. This suggests an upside potential of around 32% from the last trading price. Recommend BUY! The justified premium ~15% is attributed to several factors:  Anticipated growth in emerging JVs

Bajaj Auto Ltd | Q3FY24 Result Update | Exports recovery is crucial, margin headwinds ahead! CMP: Rs 7,221 | Target Price: Rs 6,557 | Downside: 9.1% | Rating: SELL Revenue/EBITDA/PAT is higher than our estimates by ~1%/6%/5% respectively in Q3FY24. The beat was largely on the Gross margin side vs. our estimates (healthier by 92bps, received benefits of soft commodity prices), better realization (~1% higher than our estimates) & cost control specially on the Employee side was supportive for the margin. On the guidance, domestic volumes continue to remain healthy, while there is a delay in exports recovery due to inflation, currency availability and the Red sea issues. In our view, Q4 will see lower margin (~19.4%) as a few commodities started inching-up, this along with substantially higher freight charges, product launch expenses ahead & rising EV contribution. We expect Volumes/Revenue/EBITDA/PAT to grow at a CAGR ~12%/20%/25%/23% respectively FY23-FY26e. Volumes will be driven by continued strong momentum in 2W domestic, gradual recovery in exports, and this is followed by a ramp-up in Chetak and Triumph models. Based on our estimates, the stock is trading expensive at 19.3x FY26e EPS of Rs 374. We maintain SELL rating with a revised fair value of Rs 6,557 per share as most of the near term triggers looks to be priced-in. Margin will sustain at 19.5-20.5% range, headwinds ahead! • Exports recovery is very crucial for the sustenance of EBITDA Margin at higher level (~20%+) as headwinds for margins are getting intensified. The company has aggressive plans for the EV network expansion & new launches, which can drag overall margins. • Similarly, the company might need to sacrifice some margin as substantial increase in the freight cost during export softness is negative. This, along with signs of commodity inflation is another headwind in the making. • We expect Q4 EBITDA Margin will be ~19.4% due to above reasons. While, we maintain EBITDA Margin band for Bajaj Auto at 19.5-20.5% range in the foreseeable future. Optimistic on domestic, weak macros in exports, while EVs remain core focus area • Bajaj is a clear beneficiary of improving 2W demand in domestic, and expect only a gradual recovery in exports. We anticipate total volumes to grow at CAGR 12.2% FY23-FY26e to touch ~5.5mn units. • Domestic volumes rebounded in the recent past and continue to show strong momentum in the 125cc+ segment, where Bajaj has a strong foothold. Within 2Ws, the market share improved by 286bps YoY to 13.9% in Q3FY24. Similarly, gained share in 3Ws by 134bps YoY to 65.5%. We have projected India volumes to grow at 18.1% CAGR FY23-FY26e to touch 3.46mn units. • Macro-economic factors remain the worry point in exports, the Red Sea issue can turn out to be a near term pain. Expect recovery to be only gradual as the currency availability & inflation cool-off takes its own pace of time to ease. Anticipate 8% dip in FY24 volumes, and to grow at 14%/10% in FY25/FY26 respectively. In the recent quarter, Bajaj lost share in 2Ws by 187bps to 44.9% in Q3FY24, while its listed competitors along with HMSI gained some share. On the other side, Bajaj gained share in 3Ws exports by 282bps YoY to 49.6%. • The core focus remains on the Chetak as the company has improved supplies, network expansion and new product launches are on the cards. This will support Bajaj to improve its market share further in India. Outlook and Valuations • With marginal tweaks & better than expected Q3 results, we have upgraded EPS for FY24/FY25/FY26 by ~2%/1%/1% respectively. • Bajaj should be able to keep EBITDA Margin near 19.5-20.5% range due to the combination of Triumph, gradual recovery in exports and continued traction in domestic sales. • We maintain SELL rating on the stock for a target price of Rs 6,557 per share. Expensive valuations & concerns on International markets recovery remains a worry point as Bajaj derives ~37% of volumes from exp

Swaraj Engines Ltd | Q3FY24 Result Update | Tractors on the edge of picking up, Swaraj positioned well, Accumulate! CMP: Rs 2,265 | Target Price: Rs 2,503 | Upside: 10.5% | Rating: ACCUMULATE Swaraj Engines Ltd (SWE) Q3 numbers are weaker vs. estimates owing to lower-than-expected engine sales, mix and lesser operating leverage. However, the company continued its good performance and reported 7th successive quarter of engine sales growth (YoY). Considering high capacity utilization and future demand scenario, the company plans to increase the capacity from 150K units annually to 195K units through internal accruals. Recent onground dealers check suggests that tractors are on the edge of picking-up driven by the flow of subsidies from various schemes. This, along with festivals to lift Q4 demand YoY. We anticipate a gradual possible shift of business from Kirloskar to SWE in the coming years. The company’s sales outperformance vs. the industry should continue going forward as ‘Swaraj’ is known among quality names in the industry & higher flow of business due to shift will keep giving additional volumes. Considering sound fundamentals, consistent dividends and possible increase in the business makes SWE a good investment avenue. We have rolled over our valuation multiple from Sept 2025 to Mar 2026 earnings, however downgraded from BUY to ACCUMULATE due to recent sharp run-up in the stock price with a fair value of Rs 2,503 per share (18x Mar 2026 EPS of ~Rs 139). Q3FY24 result analysis¬ – Soft numbers owing to lower operating leverage & mix • Revenue/EBITDA/PAT was lower than our estimates by 5%/12%/10% respectively in Q3FY24, this was largely due to lower-than-expected engine sales, mix and lesser operating leverage. • Swaraj in Q3 sold 27,104 engines, growth of 0.6% YoY vis-à-vis industry degrowth of 4.9% for the same period. Thus, maintained its outperformance. Realization dropped marginally by 0.4% YoY to ~Rs 103K per unit. • EBITDA Margin at 11.7% was lower vs. our estimates by 93bps. This was on account increase in the RMC, mix and lower scale of operations. Tractor market on the edge of picking due to various subsidy schemes • DBT, National Horticulture Mission, other schemes & clearing some past dues started providing subsidies/cash flows to farmers in various states. This, along with small festivals in Q4 is likely to increase demand for tractors. • The peak season will begin from Holi and till June it is expected to remain positive YoY. In a few states, the subsidy application opened twice in this fiscal year, which is expected to boost tractor sales. If 2024 rain comes normal, then rural will be back in the form again. Crop prices remain flat to positive. • On the negative side, discounts and the inventory situation remain higher than the usual as it’s a push market. Stock with dealers is close to 2-3 months. M&M and Swaraj are doing good due to launches, this is followed by TAFE & Escorts. 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 flow of business observed from the Kirloskar to Swaraj (after Kirloskar's exit from Swaraj Engines) will keep giving additional volumes vs. previous year. Outlook and Valuations • Tweaked estimates marginally, EPS for FY24/FY25 reduced by ~5%/2% respectively. • Looking at the good future demand scenario, Swaraj Engines 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. • We rollover from Sept 2025 to Mar 2026, assigned 18x multiple (maintained) to FY26e EP

Hero MotoCorp Ltd | Company Update | Filling white spaces faster, launched feature rich competitive products! CMP: Rs 4,440 | Target Price: Rs 4,957 | Upside: 11.6% | Rating: Accumulate The company launched two new motorcycles viz. Xtreme 125R and Mavrick 440 today at the CIT, Jaipur. These premium motorcycles are full of modern features and are not less than competitors (comparative tables displayed in the subsequent pages). In our view, young customers are looking for something new and an all-rounder two-wheeler to buy. These new launches fits well to make them happy. The Xtreme 125R will help Hero to improve its market share, on the other side Mavrick 440cc will be able to pull more new customers/upgraders from the segment leader. We recommend ACCUMULATE (downgraded from BUY due to sharp run-up in the stock price) Hero MotoCorp’s stock with a revised fair value of Rs 4,957 per share as they are filling the white-spaces faster. Apart from premiumizing the core models with Xtec, Hero launched many premium motorcycles (X440, Karizma, Mavrick, Xtreme, Xpulse, etc.) in the last seven months, upgraded 300 stores to Hero 2.0 in just 300 days with the aim of 400 by the end of this fiscal, opened three Hero Premia stores with the target of 100 by June 2024, increased EV network from the three cities to 100+ & likely to see big scale-up, increasing global reach as they have a presence in 50 countries with the aim to 1st scale-up in top 10 countries. The combination of premium motorcycles and increasing exports contribution will not only increase volumes, but also realization & margins for the company. Two wheelers finally gaining ground, recent premium launches have been well acclaimed by customers/dealers, and new CEO has a clear & sharper focus on growth with portfolio expansion. This, along with compelling valuations are some core reasons suggesting to accumulate the stock. Xtreme 125cc – feature packed, sporty, & not less than competitors products • We believe this motorcycle will satisfy demands of new age customers as it has 1) New Sprint-EBT engine, 2) Full LED setup, 3) Single channel ABS, 4) LED projector headlamp & winkers, 5) higher fuel efficiency (66 KMPL), 6) 37mm front suspension (1st in the segment), 7) light weight, 8) 7-step pre-load adjustable monoshock suspension by Showa, 9) 276mm largest front disc (1st in the segment), 10) 11.4bhp, 11) Hazard lamp (for safety in foggy climate), & many other features. • This motorcycle will be available in stores starting 20th Feb 2024. Starting price is Rs 95,000 (ex-showroom) and the ABS variant is priced at Rs 99,500 (ex-showroom). The pricing is near in-line with major competitors. With the features it provides, we believe Hero can sell monthly 25K units. Mavrick is marvellous – to strengthen Hero’s position in the premium • Mavrick 440c launched in the upper premium segment and is positioned as the Powerful Modern Roadster. The motorcycle looks reasonably decent with 36nm torque, adaptable to E20 fuel, and metal body with the use of high strength steel. • The bike has 35+ features in terms of safety, security, driver navigation, bluetooth, interactive telematics, among others. • Mavrick is launched in three variants, bookings will start in Feb 2024 along with the price announcement, and deliveries to begin from April 2024. • Mavrick is likely to be priced lower than X440. We anticipate 5K units monthly sales is doable, but all depends on the pricing. What’s more ahead…? • Premium, EV and Digital remain three core areas of focus. • To increase X440 & Karizma’s combined capacity soon to 10K units/month from existing 6K units/month. Bookings for X440 & Karizma are 25K & 13.6K units respectively. • On eScooters, Hero will launch four new products in FY25 serving premium, mainstream and mass market customers. The mid-term plan is to enter global markets, and to improve performance & reduce cost. • The plan is to launch a few eMotorcycles (some with Zer