Auto Stocks Outlook for the week – 21 to 25.03.2016
Auto
Index may raise to 8,000; Maruti Suzuki weak
( www.rupeedesk.in )
Stocks
of major automobile companies are seen trading with a positive bias next week.
The CNX Auto Index, which yesterday closed 0.6% higher on week at 7767.10
points, is likely to touch the critical 8000-point mark in a truncated week.
Markets will remain closed on Thursday and Friday due to Holi and Good Friday.
The positive movement in auto stocks is due to an overall positive sentiment in
the market and the absence of sector-specific cues.
Passenger
car segment market leader Maruti Suzuki India Ltd is still overvalued despite
rising from
the
lows of 3,200 rupees in the past couple of weeks. The stock continues to
witness a short-term
weakness
and is likely to see some slide this week as well. Despite the short-term
weakness, the
company's
fundamentals remain strong. It is seen reporting a double-digit growth in terms
of units sold for 2015-16 (Apr-Mar) despite a high base, primarily on account
of strong product portfolio.
The company
had recently launched its sub-4 metre compact sports utility vehicle Brezza.
This car, along with the traditionally strong Swift and Alto hatchbacks and the
newly launched Baleno, continues to do brisk business for the country's largest
carmaker.
The
Stock of Hero motocorp, still looks positive, especially after the launch of
its research and
development
centre at Jaipur -- a testament to the company's growing in house engineering
capabilities.
Stocks of Bajaj Auto are seen trading in a range. Stocks of Tata Motors that
have performed well over the past couple of weeks are seen nearing a critical
resistance level of 380 rupees, analysts said. If shares go past this level,
they are seen rising to 400-rupee level, backed by a strong turnaround in demand
for utility vehicles and a healthy pipeline of the company's UK subsidiary
Jaguar Land Rover.