Auto Stocks Outlook for the week – 03 to 07.07.2017
Auto Stocks Outlook for the week – 03 to 07.07.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading in a range next week as markets will closely
monitor the situation arising after the roll out of goods and services tax. In addition to June being
traditionally a weak month for markets, the implementation of GST regime is causing a
consolidation phase in the stocks.A sharp bounce is likely in July after the initial teething issues of the new tax regime wears out.Under goods and services tax, the biggest automobile segment of small cars is likely to record a slightly higher tax rate of 29-31% including cess, against the current rate of nearly 28%. The rates may vary a bit, depending on the amount of state tax imposed. Luxury car segment and sports utility vehicles are expected to be the biggest beneficiary of the new regime with 4-9% relief in taxes. In case of two-wheelers, the new tax rates are largely unchanged from the current levels. While motorcycles with engine capacity of less than 350cc would attract a tax rate of 28%, against the current rate of nearly 30%, the rate on those with capacity of over 350cc would rise to 31% from 30%. Prices of commercial vehicles are expected to remain around current levels, as the new tax rate will be about 2% less than the current rate of nearly 30%. Automobile companies are also expected to revise the prices of vehicles from July with the new tax structure in place. While there is a confusion in the market over the implications of the new tax regime, the situation is likely to smoothen out eventually after 3-4 weeks of implementation, an industry insider said. Next week, shares of TVS Motor Co Ltd are likely to rise and may reach the level of 570 on technically. The company Wednesday had signed a pact with a Sri Lanka-based distributor, Abans Auto, for export of 200cc three-wheeler passenger vehicles, TVS King. Stocks of automobile companies may also see a slight impact on their monthly sales figures for June, expected to be notified by Monday.
Source : Cogencis Information Services Ltd.
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Auto Stocks Outlook for the week – 03 to 07.07.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading in a range next week as markets will closely
monitor the situation arising after the roll out of goods and services tax. In addition to June being
traditionally a weak month for markets, the implementation of GST regime is causing a
consolidation phase in the stocks.A sharp bounce is likely in July after the initial teething issues of the new tax regime wears out.Under goods and services tax, the biggest automobile segment of small cars is likely to record a slightly higher tax rate of 29-31% including cess, against the current rate of nearly 28%. The rates may vary a bit, depending on the amount of state tax imposed. Luxury car segment and sports utility vehicles are expected to be the biggest beneficiary of the new regime with 4-9% relief in taxes. In case of two-wheelers, the new tax rates are largely unchanged from the current levels. While motorcycles with engine capacity of less than 350cc would attract a tax rate of 28%, against the current rate of nearly 30%, the rate on those with capacity of over 350cc would rise to 31% from 30%. Prices of commercial vehicles are expected to remain around current levels, as the new tax rate will be about 2% less than the current rate of nearly 30%. Automobile companies are also expected to revise the prices of vehicles from July with the new tax structure in place. While there is a confusion in the market over the implications of the new tax regime, the situation is likely to smoothen out eventually after 3-4 weeks of implementation, an industry insider said. Next week, shares of TVS Motor Co Ltd are likely to rise and may reach the level of 570 on technically. The company Wednesday had signed a pact with a Sri Lanka-based distributor, Abans Auto, for export of 200cc three-wheeler passenger vehicles, TVS King. Stocks of automobile companies may also see a slight impact on their monthly sales figures for June, expected to be notified by Monday.
Source : Cogencis Information Services Ltd.
