Auto Stocks Outlook for the week – 08 to 11.03.2016
( www.rupeedesk.in )
Sentiment
for stocks of major auto companies is likely to remain positive next week,
despite
Budget setbacks, after most of them posted better-than-expected production
and
sales numbers for February. While sales of medium and heavy commercial
vehicles
continued growing in double digits in February, two wheelers manufacturers
reported
healthy year-on-year growth.
Among
Nifty 50 auto companies, sales of majority of vehicle makers rose
in
February. Among four-wheeler manufacturers, total sales of Tata Motors rose 6%
on
year in February, while Mahindra and Mahindra reported a rise of 16% in volume.
Total
sales of India's largest carmaker Maruti Suzuki India, however, fell 1% due to
an
agitation in Haryana where its manufacturing plants are located.
Both
the two-wheeler makers in Nifty 50 reported positive sales growth with Bajaj
Auto's
total sales rising 12% on year and market leader Hero MotoCorp's volume
rising
13.6%.
Investors
would watch for product price hikes by more manufacturers following a 1-
4%
infrastructure cess on vehicles announced in the Union Budget for 2016-17 (Apr-
Mar)
on Monday. Already Maruti Suzuki India Ltd, Mahindra Mahindra Ltd and
Tata
Motors Ltd have announced a hike in vehicle prices.
In
his Budget speech, Finance Minister Arun Jaitley announced the levy of an
infrastructure
cess of 1% on small cars, 2.5% on diesel cars, and 4% on vehicles with
higher engine capacity
and sport utility vehicles.