Auto Stocks Outlook for the week – 19 to 23.06.2017

Auto Stocks Outlook for the week – 19 to 23.06.2017

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Auto Stocks Outlook for the week – 19 to 23.06.2017 )

Stocks of most automobile companies are seen trading within a range next week, with Tata Motors Ltd and TVS Motor Co Ltd likely to be in focus. Tata Motors' management expects to gain 5% market share in the domestic passenger vehicle and commercial vehicle segments over the next couple of years. The expected launch of compact sports utility vehicle Nexon in September is expected to add to the momentum. We are fairly confident on Jaguar Land Rover's growth and profitability and strong domestic business turnaround from Jan-Mar. Current currency hedging issues will fade away, assuming currency stability in 2017-2019 (Apr-Mar). TVS Motor Co Ltd's growth is expected to outpace that of the two-wheeler industry in 2017-2019 (Apr-Mar), led by new launches and commencement of supplies to BMW group. The Chennai-based company also aims to increase its market share from the current 15.3% to nearly 17% in the current financial year started April. The country's largest carmaker, Maruti Suzuki India Ltd, looks strong on the back of a popular portfolio comprising the Vitara Brezza compact sport utility vehicle and premium hatchback Baleno. Positive on the carmaker on the back of an increase in the average selling price, led by an expanding portfolio in the premium segment and fresh capacity addition in the Gujarat facility We remain positive on the company's growth story on the back of uptick in rural demand, supporting macro tailwinds like seventh Pay Commission payout, falling interest rates, urbanization and growing middle class. The country's largest two-wheeler manufacturer, Hero MotoCorp Ltd, is expected to benefit from the forecast of monsoon rains at 98% of the long period average this year, owing to the company's large presence in rural areas. Expected good monsoon and higher infrastructure spending from GOI (government of India) are expected to be the macro drivers, while the new model launch (six models) would be the micro drivers for Hero MotoCorp.

Source : Cogencis Information Services Ltd.