Shares of major automakers are seen tracking the broader indices
during the coming week in absence of any sector-specific triggers. With the earnings
(Apr-Jun) season over now, there isn't any major trigger in the market for the auto
sector. Strong performance from Tata Motors Ltd's subsidiary Jaguar Land
Rover would see its counter trade with a positive bias during the week. The positive
movement is not going to be a lot, but, yes, it should have an impact.
The Reserve Bank of India last Thursday announced its decision to
auction 220-bln-rupee worth cash management bills every Monday in order to tighten
liquidity in the market, a move that may force banks to hike interest rates. Karnataka Bank
and Andhra Bank have already hiked rates. If this trend (weekly cash management bills)
continues, then other banks would also have to do the same, which would have a direct
bearing on the sector. But for this week, I don't think it will have much of an impact.
In terms of quarterly earnings, Mahindra & Mahindra Ltd
Tuesday beat analysts' expectations to post a 29.3% year on-year growth in net profit at
9.38 bln rupees in Apr- Jun, aided by an improvement in profitability and dividends from
subsidiaries. The automaker's net sales in Apr-Jun were 99.1 bln rupees, up from
92.5 bln rupees a year ago but lower than estimates.
