Auto Stocks Outlook for the week - 28.08.2017 to 01.09.2017

Auto Stocks Outlook for the week - 28.08.2017 to 01.09.2017

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Auto Stocks Outlook for the week - 28.08.2017 to 01.09.2017 )

The shares of most automobile companies are seen rising next week due to an expected uptrend in heavyweights such as Maruti Suzuki India Ltd. Investors remain positive on Maruti Suzuki, the country's largest carmaker, due to a high-margin product mix comprising the Baleno hatchback and the Vitara Brezza compact sport utility vehicle. The strong outlook for the company is supported by its launch pipeline, expansion of its distribution network, a shift in consumer preference to petrol variants, an overall macroeconomic recovery, and good demand for the Baleno, Vitara Brezza and DZire. The Chennai-based two-wheeler manufacturer TVS Motor Co Ltd saw an 18.9% on-year
jump in revenue from operations for the June quarter, led by higher sales of motorcycles and scooters. We believe the company is on the cusp of a major transformation in terms of segment and brand market share due to perfect alignment of new and upcoming products with emerging and upcoming market trends. The strong volume growth, aligned with sector trends, improved profitability, and the
management's focus on improving operational efficiency will support the company's valuation. The Mumbai-based company lost its leadership position in the utility vehicles space to Maruti Suzuki. The company had reported a 20% on-year fall in net profit for the June quarter at 7.7 bln rupees. The company's passenger vehicles segment saw nominal growth of 4.4% during the quarter.

Source : Cogencis Information Services Ltd.