Auto Stocks Outlook for the week – 08 to 12.06.2015
Stocks
of major auto makers are seen muted during the coming week with all eyes on the
advance of the southwest monsoon to the northern parts of India after hitting Kerala
today. The southwest monsoon hit the coast of Kerala with a four-day delay and
the India Meteorological Department stated that conditions are favourable for
its advance to states such as Karnataka, Andhra Pradesh and Tamil Nadu.
The
India Meteorological Department had predicted for rains to be at 88% of the
long-period average, which leaves the country staring at a second consecutive
drought. Automobile sales are directly dependent on monsoon, with the same
translating into sales in the rural parts of the country. A deficient monsoon will have a bearing on
two-wheeler and tractor sales to a great extent.
Stocks
of Hero (MotoCorp Ltd), Bajaj (Auto Ltd), and M&M (Mahindra & Mahindra
Ltd) will be under pressure next week. The auto space at large is also seen
subdued. It is a wait-and-watch game.
Earnings
for Jan-Mar from automakers largely weren't impressive, which is seen adding to
the gloom through the coming week as well. Passenger car sales having picked up
during May should see counters of the respective manufacturers trading with a
minor positive bias.
The
counter of Maruti Suzuki India Ltd is seen positive next week, backed by an
impressive growth in sales during May, and with new launches getting lined up,
with the first one, S-Cross, expected during the third week of July.
Tata
Motors Ltd is likely to see negative action in its counter in the week ahead,
due to a belowaverage performance from its subsidiary Jaguar Land Rover.
