Auto
Stocks Outlook for the week – 29.12.2014 to 02.01.2015
( www.rupeedesk.in )
Stocks of leading automobile manufacturing companies are seen flat next
week tracking the broad market. The underlying bias is expected to remain bearish in
week starting Monday due to heavy selling by foreign institutional investors.
Counters such as Mahindra & Mahindra and Tata Motors are likely to
see further correction owing to weak despatches by these companies to dealers over the past
few months. We expect shares of two-wheeler companies to do better than those of
four-wheeler and commercial vehicle manufacturers, mainly due to sustained demand for their
products.
Demand for two-wheelers, particularly scooters, is seen remaining at
sustained levels. Scooters sales have been growing month-on-month for the past two years led by
demand in urban India. Therefore, positive on Hero MotoCorp and TVS Motor Co. Hero MotoCorp
is the second-largest player in the scooters segment, while TVS Motor Co is the third
largest. There is buzz around stocks of Hero MotoCorp also due to the company's renewed focus on
exports.