Auto Stocks Outlook
for the week 10 to 14.11.2014
( www.rupeedesk.in )
Stocks of major automobile
manufacturers are expected to see a marginal fall in their values in the week ahead because of
profit booking. Eicher Motors, ancillary products manufacturers such as Apollo Tyres
and Motherson Sumi Systems will report their Jul- Sep earnings in the week ahead, and
the numbers will guide these counters.
Eicher Motors will declare its
Jul-Sep earnings on Wednesday, while Motherson Sumi Systems and Apollo Tyres will declare
their earnings on Monday.
Auto sector stocks have been gaining
ground over the past few months on account of rising sales in key vehicle
categories such as two-wheelers, passenger cars and medium and more recently, heavy commercial
vehicles.
Automobile stocks present an
opportunity to book profits at their current levels and in this regard, they mirror broader
markets, which also have room for a sell-off.
Ashok Leyland, the country's
second-largest commercial vehicles manufacturer, yesterday declared its Jul-Sep
earnings. A 1.1-bln-rupee exceptional gain helped Ashok Leyland report a net profit of 1.2
bln rupees for Jul-Sep, against a net loss of 250.5 mln rupees a year ago. Ashok Leyland's
Jul-Sep net profit at 257 mln rupees. The one-time gain was derived as profit from sale
of immovable properties during the quarter, according to the company's profit and
loss statement.
In August, the automaker had
completed sale of one of its residential properties in Chennai for a total consideration of
2.10 bln rupees. Adjusted for the exceptional item, Ashok Leyland's net profit was
largely in line with expectations due to a sharp expansion in operating profit margin.
Ashok Leyland's operational
performance improved significantly in Jul-Sep on the back of a 9.7% on-year increase in total
volume.
The ongoing commercial vehicle cycle
recovery, moderation in diesel prices and potential rate cuts should lend an
added boost to Ashok Leyland's sales volume growth.
