Auto Stocks Outlook For The Week – 15 to 19.01.2018

Auto Stocks Outlook For The Week – 15 to 19.01.2018

             Equity Cash/Futures/Options Segment 

An expected uptick in the shares of heavyweights such as Maruti Suzuki India Ltd and Tata Motors Ltd is likely to take the Nifty Auto index higher next week. We expect the recent price hike undertaken by Maruti Suzuki as a positive for the New Delhi-based carmaker, as it will help ease the cost pressure on account of commodities. Investors also maintain a positive outlook on the company due to expectations of "healthy" Oct-Dec earnings, to be announced on Jan 25. Benefits from the Seventh Pay Commission, a recovery in the rural economy in the backdrop of two successive years of normal to near-normal monsoon, and expectations of a good monsoon this year are likely to lift sales of passenger vehicles and two-wheelers going ahead, Society of Indian Automobile Manufacturers said on Thursday. The industry body expects two-wheeler sales to grow 12% on year in the current
fiscal year ending March and passenger vehicle sales to rise 7% on year. A rise in sales of Tata Motors Ltd's subsidiary Jaguar Land Rover has led to a positive outlook for the Mumbai-based company. Retail sales of subsidiary Jaguar Land Rover in December rose 0.6% on year to 55,697 units. Land Rover sales were up 4.1% on year at 40,618 units in December, led by introduction of the Range Rover Velar and the ramp-up of Discovery. The company is set to launch the new Range Rover Velar sport utility vehicle on Jan 20. Being the largest manufacturer of commercial vehicles in the country, Tata Motors Ltd is also likely to gain from an increase in infrastructure spending and restrictions on overloading. SIAM also raised its forecast for sales growth in the commercial vehicles segment to 13% in the financial year ending March from 4-6% estimated earlier, after seeing the better-than-expected sales growth.

Source : Cogencis Information Services Ltd.

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