Auto Stocks
Outlook for the week – 02 to 06.02.2015
( www.rupeedesk.in )
Stocks of major automobile manufacturers
next week are seen taking cues from their respective
sales numbers to be announced
Monday. Automakers would detail sales numbers for January
2015, and more importantly, for
the first month since the reversal of excise duty benefits that
were offered to the industry till
Dec 31.
The January numbers would be
tepid on the back of excise duty hike, so the stocks are seen
under pressure during the coming
week. The auto industry had enjoyed a 300-600-basis-point
reduction in excise duty on
vehicles for almost a year, following which the government decided
to withdraw the same with effect
from Jan 1.
Maruti Suzuki India Ltd, the
country's leading carmaker, is likely to be least affected by the
reversal, due to a fall in crude
prices pulling up sales of petrol vehicles when compared with the
diesel-powered ones. The presence
of a bias towards petrol-powered vehicles in Maruti Suzuki's
portfolio would see it report
better numbers than its peers.
Mahindra & Mahindra Ltd, on
the other hand, would be seen facing the brunt of the reversedieselisation,
and post a fall in sales. The
overbearing presence of a diesel portfolio in M&M's
ranks makes it an underperformer
currently and Next week also the stock will be under pressure.
New launches in the passenger
vehicle division, and signs of a revival in the heavy commercial
vehicle space would see Tata
Motors Ltd post positive sales numbers for the month of January,
and the automaker's stock is seen
trading with a positive bias as a result. Growth being exhibited
by subsidiary Jaguar Land Rover
would also aid the company's scrip.
Hero MotoCorp Ltd is scheduled to
detail its earnings for the quarter ended December on
Tuesday. The company's stock
would trade down up till then, and in line with the numbers
during the second half. India's
largest two-wheeler maker is seen reporting a 34% on-year rise in
net profit at 7.03 bln rupees for
Oct-Dec.
The rise in profit is likely to
be backed largely by cessation of amortised royalty to its erstwhile
partner Honda Motorcycle. The
royalty amount was 45 bln rupees amortised over 14 quarters till
Apr-Jun of 2014. The automaker is
expected to report a 1% on-year fall in net sales at 67.58 bln rupees, dragged down by lower
volumes during the post-festival season.
