Auto Stocks Outlook for the week – 09 to 13.03.2015
( www.rupeedesk.in )
Stocks
of major automobile manufacturers are seen rising in the week ahead as the
Reserve Bank of India cut the repo rate by 25 basis points, which could
increase demand for vehicles. Two out of every three vehicles in India are
bought on credit. As banks ease lending rates, it will lead to lower interest
burden on consumers, who will be more inclined to buy vehicles.
Stocks
of companies in rate sensitive sectors such as banks, real estate and
automobiles are
expected
to rise following the Reserve Bank's action. Automobile companies' stocks have
risen over the past year on account of good sales in specific vehicle
categories.
Sales
of medium and heavy commercial vehicles, scooters, and passenger cars have been
rising in a sustained manner, aiding the stock prices of Hero MotoCorp, Bajaj
Auto, Ashok Leyland and Maruti Suzuki.
The
trend of rising stock prices of automobile companies is seen continuing in the
medium term on the back of the rate cut by the Reserve Bank of India and strong
sales in some vehicle
categories.
