Auto earnings preview: Sharekhan Special dated July 11, 2006

[Sunil]

Sharekhan Special [July 11, 2006] Please see the attachment for details Share khan www.sharekhan.com

Summary of Contents SHAREKHAN SPECIAL Auto earnings preview Q1FY2007 has been a strong quarter for the automobile sector. Bajaj Auto's motorcycle sales grew by 34.5%, Maruti's car sales grew by 19% and Tata Motors' commercial vehicle sales grew by 64% (on a low base of Q1FY2006 due to the implementation of the new emission norms). The volume growth in the quarter should lead to margin expansion, thereby mitigating the impact of the rising costs to some extent. Most of the vehicle companies are planning to raise the prices by 2-3% from Q2FY2007 onwards to offset the impact of the cost increases. We expect Ashok Leyland, Bajaj Auto and Maruti Udyog to be among the leaders in the sector for this quarter.

Regards, The Sharekhan Research Team myac...@sharekhan.com

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