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Stocks of major automobile manufacturing companies are expected to exhibit stock-specific action next week with those of companies such as Mahindra & Mahindra Ltd and Tata Motors Ltd set to react negatively to the 90 paisa hike in diesel prices. There is not much action expected. The trend will be slightly sideways, but movement is largely expected to be in a tight range. Oil marketing companies Friday hiked prices of diesel by 90 paisa, a move that would see counters of companies with a diesel portfolio acting negatively. The cut in price of petrol is expected to continue to bring make customers and auto companies happy, with Hero MotoCorp Ltd and Maruti Suzuki India Ltd seen benefiting most from it. Commodity prices have also been softening recently, so that is also a win for auto stocks.
From the quarterly results point of view, Ashok Leyland Friday posted worse-than-expected earnings for Jan-Mar, with a 42% year-on-year fall in net profit. The results made sure the company's stocks fell, something which is expected to continue in the coming week also. Growing competition from Tata (Motors) will not help Ashok Leyland's counter. This week, Eicher Motors is scheduled to detail its Jan-Mar earnings on May 13 and Bajaj Auto Ltd on May 16.
