Auto Stocks Outlook for the week – 07 to 11.Jul.2014
Stocks of major automobile manufacturers are seen moving on news and expectations
related to Thursday's presentation Union Budget for 2014-15 (Apr-Mar). Auto stocks will
react positively if measures such as implementation of goods and services tax are
announced in the Budget. Positive movement will also be seen based on a growth-oriented
Budget, as that would encourage people in the medium-term to engage in car purchases.
Last week, the government announced an extension to the reduced excise duty on vehicles
up to Dec 31, and thus a further extension of the duty sop to Mar 31 is not expected in the
Budget. The month of June provided cheer for the industry in the form of impressive sales
volumes, and so positive measures for the sector, if announced in the Budget, could result
in a rally through the following week.
Most automakers reported on-year growth in their sales numbers, with only Mahindra &
Mahindra Ltd, and Tata Motors Ltd being the exceptions. The counter of Tata Motors is,
however, seen positive in the coming week, on news the company was working to revamp
its portfolio doing the rounds. Maruti Suzuki India Ltd's counter is expected to trade in a
narrow range ahead of the Budget. The bias is seen positive, backed by its sales numbers of
June.
Stocks of major automobile manufacturers are seen moving on news and expectations
related to Thursday's presentation Union Budget for 2014-15 (Apr-Mar). Auto stocks will
react positively if measures such as implementation of goods and services tax are
announced in the Budget. Positive movement will also be seen based on a growth-oriented
Budget, as that would encourage people in the medium-term to engage in car purchases.
Last week, the government announced an extension to the reduced excise duty on vehicles
up to Dec 31, and thus a further extension of the duty sop to Mar 31 is not expected in the
Budget. The month of June provided cheer for the industry in the form of impressive sales
volumes, and so positive measures for the sector, if announced in the Budget, could result
in a rally through the following week.
Most automakers reported on-year growth in their sales numbers, with only Mahindra &
Mahindra Ltd, and Tata Motors Ltd being the exceptions. The counter of Tata Motors is,
however, seen positive in the coming week, on news the company was working to revamp
its portfolio doing the rounds. Maruti Suzuki India Ltd's counter is expected to trade in a
narrow range ahead of the Budget. The bias is seen positive, backed by its sales numbers of
June.
