GOLDEN RULES FOR TRADING

Automobile Stocks Outlook for the week – 27 to 30.04.2015

Automobile Stocks Outlook for the week – 27 to 30.04.2015

Stocks of major automakers, in line with the broader market, are seen trading with a negative bias next week due to disappointing earnings and a weak rupee, adding that the sector would eye the Jan-Mar results of Maruti Suzuki India Ltd.

India's largest carmaker, Maruti Suzuki, is scheduled to detail its Jan-Mar earnings on Monday, which would be closely watched by the sector. Maruti Suzuki is expected to report a 39% on-year rise in its net profit at 11.14 bln rupees for the quarter ended March, largely aided by higher volumes by way of increasing acceptance of petrol cars, along with favourable foreign exchange.

Expect some reduction in discounts and benefits from lower commodity costs to further improve profitability. There is a possibility of upside surprises to our estimates as well if the entire benefit of the decline in commodity prices flows in Jan-Mar itself.

Maruti Suzuki's counter is seen trading up during the first half of the week if the numbers are in line with expectations, adding that any fall from the predictions could put the stock under pressure. Apart form Maruti Suzuki, TVS Motor Co Ltd is expected to detail its Jan-Mar numbers on Wednesday.

The counter is seen positive during the week, in expectation of the earnings, and also backed by an impressive performance on the volume front.