Auto Stocks Outlook for the week – 16 to 20.06.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks of major automakers are likely
to rise next week as the vehicle buying sentiment
in the market has improved and the
stocks are seen undervalued at current levels.
Stocks of Bajaj Auto, Mahindra &
Mahindra and Hero Moto Corp are seen rising 5-7%
from current levels over the next two
weeks.
The positive sales in the market are
expected to reflect in automobile stocks and the
outlook on the sector as a whole is
positive with buying opportunities in most
companies' stocks. Currently a buy
rating on stocks of Nifty automobile manufacturers,
reflecting the buoyancy in market
sentiment. In May, domestic passenger car sales grew
3.1% on year to 148,577 units, while
total passenger vehicle sales were up 2.8% to
207,953 units.
Passenger vehicle sales in India have
been falling every month on a year-on-year basis
since December 2012, barring February
2014, when they were up 1.3%. Market
sentiment has now changed and people
have begun buying cars. A stable government
at the Centre and the excise duty cut
on automobiles have improved sentiment in the
sector, which will keep the
rally going in automobile companies' stocks in the near term