Auto Stocks
Outlook for the week – 20 to 24.07.2015
(Likely to trade consolidation
next week)
Stocks of major automakers are
seen in a phase of consolidation next week, with markets awaiting
earnings of Bajaj Auto Ltd and
Eicher Motors Ltd to get a feel of the numbers automobile
manufacturers will be reporting.
In Apr-Jun, automobile industry
witnessed subdued volumes amid on going slowdown coupled with
lower monsoon expectation
impacting rural economy. Moreover, subdued sentiment across
geographies impacted sales in
urban markets. Excise duty roll back continues to impact sales during
the quarter. Majority of the
segments like motorcycles, LCVs, tractors, UVs (utility vehicles), three
wheelers witnessed on-year
decline except PCs (passenger cars), M&HCVs and scooters.
Pune-based Bajaj Auto and
Gurgaon-based Eicher Motors will sound the earnings season bugle for
the automobile industry next
week, with the latter scheduled to hit the market first, on Tuesday.
Eicher Motors Ltd's consolidated
net profit for Apr-Jun is seen rising 55% on year to 2.44 bln
rupees, aided by strong sales of
the Royal Enfield motorcycle division.
Bajaj Auto is scheduled to detail
its Apr-Jun earnings on Thursday. The automaker is seen reporting
a net profit of 9.60 bln rupees,
up 30% on year. The rise in the net profit is likely to be backed
mainly by benign commodity
prices, favourable currency, and lower promotion costs.
Maruti Suzuki India Ltd is
expected to have a good week, thanks to good pre-launch demand seen
for its upcoming compact sport
utility vehicle S-Cross. Maruti Suzuki's counter is seen trading with
a positive bias next week.