Auto Stocks Outlook for the week – 25 to 29.05.2015

Auto Stocks Outlook for the week – 25 to 29.05.2015

 Negative bias seen; Tata Motor, M&M earning eyed

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Stocks of major automakers are seen trading with a negative bias next week due to a likely

correction in Nifty levels, the Jan-Mar financial results of Tata Motors Ltd and Mahindra &

Mahindra Ltd, to be detailed on Tuesday and Friday respectively, would be eyed. Nifty is expected to correct during the coming week after rising through the past seven trading days and the automobile sector, being the first one to fall, is expected to lead the downward trajectory this time as well.

Among automakers declaring their respective financial results for Jan-Mar during the coming

week are Tata Motors and M&M. Tata Motors is likely to report a consolidated net profit of 41.20 bln rupees for Jan-Mar, up 5% on year. Net sales for the automaker are seen at 672.33 bln rupees, up 4% on year. The rise in sales would be supported by factors such as a recovery in medium and heavy commercial vehicle sales in India, a better product mix in its high-profit arm Jaguar Land Rover and a positive impact of foreign exchange movement. Expect standalone business likely to report 0.9% (fall in net profit). Standalone numbers showing improvement on operating leverage benefit from improving M&HCV/car sales.

Tata Motors' counter is seen as one of the few trading with a positive bias during the week, mainly in anticipation of a growth in net profit, supported also by its standalone operations

this time around, as JLR volumes declined on year. M&M, which is scheduled to detail its results on Friday, is expected to report a net profit of 5.68 bln rupees, down 37% on year. Net sales, too, are seen down on year for M&M. The company is expected to report an 18% fall in net sales to 88.36 bln rupees.

A fall in volumes of passenger vehicles and tractors is seen as the reason behind a dismal set of numbers likely to be reported by Mahindra & Mahindra. M&M continues to face pressure on its UV (utility vehicle) business, led by weak industry demand and higher competitive pressures. Tractor demand is also likely to be subdued due to lean season in domestic market. In line with the numbers, M&M's counter is seen having a negative outlook for the week.

Auto Stocks Outlook for the week – 11 to 15.05.2015

Auto Stocks Outlook for the week – 11 to 15.05.2015

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Stocks of major auto makers are seen tracking broader indices over the next week in

absence of any sector-specific triggers. Quarterly earnings posted by automobile

manufacturers have been positive so far, but largely below estimates, and hence would

keep counters of respective companies under pressure.

Hero MotoCorp Ltd's Jan-Mar net profit fell 14% on year to 4.76 bln rupees, on account

of a 1.55-bln-rupee loss due to cessation of operations of the auto maker's US-based

partner Erik Buell Racing. The company declared its Jan-Mar numbers Thursday, and

while most of the movement has been factored in, the stock would continue to trade in a

narrow range.

Erik Buell Racing ceased operations and filed for bankruptcy in April, but Hero MotoCorp booked the damages in its Jan-Mar numbers. Tax expenses for Hero MotoCorp in Jan-Mar rose disproportionately to 2.09 bln rupees from 1.87 bln rupees a year ago, pulling the company's net profit further down. Net profit fell even though the company stopped amortising its one-time royalty on products and technologies to erstwhile partner Honda Motorcycle.

Among major automobile manufacturers, commercial vehicle maker Ashok Leyland Ltd

is scheduled to detail its earnings for Jan-Mar on Tuesday. Ashok Leyland is expected to

report a standalone net profit of 2.11 bln rupees for the quarter, from a 127-mln-rupee net

loss a year ago, and its net sales are seen rising 55% to 46.76 bln rupees.

The recovery in numbers is expected on account of a revival in the medium and heavy

commercial vehicle segment, and on the company having divested heavily to reduce debt

and hence the finance costs.

Ashok Leyland's counter is seen taking positive cues from the earnings, and an

expectation of a positive trend rests if the numbers are in line with estimates. Some amount of correction is seen in Bajaj Auto Ltd's counter over the next week after a 9% rally this week. They, however, added that a short-term outlook on the stock was positive, on the back of new product initiatives announced by the company.

Auto Stocks Outlook for the week – 04 to 08.05.2015

Auto Stocks Outlook for the week – 04 to 08.05.2015

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Stocks of major automakers, in line with the broader market, are seen trading with a negative bias next week due to absence of any positive triggers, that investors would eye sales numbers for April to be posted by respective companies from May 1-4.

While auto sales numbers would be eyed next, there isn't anything positive apart from that, so the general trend in auto stocks looks negative, not only for the week, but for the fortnight. The month of April is seen dull from the sales point of view, with only a few segments and fewer manufacturers sailing in the green.

India's largest two-wheeler manufacturer, Hero MotoCorp Ltd, is scheduled to detail its Jan-Mar earnings on Thursday, which would be closely watched by the sector. The company's stock is seen trading with a negative bias during the week, mainly due to a fall in its motorcycle numbers, keeping overall revenues stagnant. Apart from Hero MotoCorp, Eicher Motors Ltd is also scheduled to detail its own set of numbers next week, on May 8.

Auto Stocks Outlook for the Week – 06 to 10.04.2015

Auto Stocks Outlook for the Week – 06 to 10.04.2015

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Stocks of major automakers are seen trading in line with the Reserve Bank of India's decisions in its monetary policy review due for Tuesday. The central bank is expected to hold key rates in its policy review, which would keep automobile stocks under pressure.

If RBI cuts the repo rate, automobile stocks will rally through the week. However, if it holds rates, the week would keep them under pressure. It is unlikely that rates would be cut. Another factor influencing the health of respective stocks during the upcoming week would be the sales numbers posted by companies.

Maruti Suzuki India Ltd's counter is seen under pressure, and trading with a minor negative bias during the week on a subdued sales performance during March, adding that a minor amount of correction was due in the counter anyway. India's largest carmaker saw overall volumes decline by 1.6% to 111,555 units during the final month of 2014-15 (Apr-Mar).

A factor serving as a minor influence on stocks during the next week would also be the start of the earnings period from Apr 15, which would keep trade in a tight range. Tata Motors Ltd would see its counter trade with a positive bias thanks to an enthusiastic response to the company's 75-bln-rupee rights issue.

Auto Stocks Outlook for the week - 23 to 27.03.2015

Auto Stocks Outlook for the week - 23 to 27.03.2015

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Stocks of major automobile manufacturers are seen in line with broader indices over the coming week, in absence of sector-specific triggers. However, there is a minor positive bias on the back of expected correction in stocks following two successive weeks of bloodbath.

Action in auto stocks will track the broader market over the coming week. Some positive

correction could be seen on account of negative activity over the past 10 sessions.

The movement is expected to be more muted in the medium term when compared to what was seen over the past eight-nine months. The market rallied over the past few months, but buying is likely to be more selective now. Investors will have a more watchful eye over the government's promises and their implementation.

Tata Motors is the pick in the auto sector for the coming week after news about the company

planning to launch six utility vehicles over the next three-four years. Bajaj Auto Ltd's counter

was unanimously picked as the one with the worst prospects for the coming week in a scenario where motorcycle sales have been falling, and are expected to continue to do so over at least 3-4 months.

The unseasonal rains across north India have adversely impacted the rabi crop output, which is seen affecting motorcycle sales in the near term. The lower output of the rabi crop is seen

adversely impacting sales and stocks of other two-wheeler manufacturers such as Hero

MotoCorp Ltd and TVS Motor Co Ltd as well.

An impact on the crop is also seen impacting tractor sales, and hence the counters of

manufacturers such as Mahindra & Mahindra Ltd, and Escorts Ltd.

Auto Stocks Outlook for the week - 23 to 27.06.2014

Auto Stocks Outlook for the week - 23 to 27.06.2014
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Stock of major automobile manufacturers are seen rising in the week ahead as the market

sentiment remains positive and broader indices are expected to gain. Over the past few

weeks, stocks of automobile companies witnessed an upward rally as the consumer

sentiment in the passenger car and two-wheelers markets has improved and consumers

have started making purchases.

Stocks of automobile companies corrected just a little over the past week, with the BSE's

automobile index falling 2.1%. But this fall is expected to be arrested next week as the

growth spiral will continue to drive broader markets. Stocks of Bajaj Auto are expected

to show a marked gain next week as the surface transport ministry is expected to come

out with regulations for quadricycles. Bajaj Auto's Managing Director Rajiv Bajaj has

said the company plans to launch quadricycles in India during October and exports will

follow soon.

Auto Stocks Outlook for the week – 16 to 20.06.2014

Auto Stocks Outlook for the week – 16 to 20.06.2014
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Stocks of major automakers are likely to rise next week as the vehicle buying sentiment

in the market has improved and the stocks are seen undervalued at current levels.

Stocks of Bajaj Auto, Mahindra & Mahindra and Hero Moto Corp are seen rising 5-7%

from current levels over the next two weeks.

The positive sales in the market are expected to reflect in automobile stocks and the

outlook on the sector as a whole is positive with buying opportunities in most

companies' stocks. Currently a buy rating on stocks of Nifty automobile manufacturers,

reflecting the buoyancy in market sentiment. In May, domestic passenger car sales grew

3.1% on year to 148,577 units, while total passenger vehicle sales were up 2.8% to

207,953 units.

Passenger vehicle sales in India have been falling every month on a year-on-year basis

since December 2012, barring February 2014, when they were up 1.3%. Market

sentiment has now changed and people have begun buying cars. A stable government

at the Centre and the excise duty cut on automobiles have improved sentiment in the

sector, which will keep the rally going in automobile companies' stocks in the near term

Auto Stocks Outlook for the week – 09 to 13.Jun.2014

Auto Stocks Outlook for the week – 09 to 13.Jun.2014
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Stocks of major automakers are likely to trade in line with broader markets next week.

Auto stocks have been moving in line with broader markets over the past week, and this

movement is likely to continue next week, as there are no specific triggers on the horizon.

Despite being rate sensitive, automobile stocks move in line with broader markets and

have maintained this traditional trajectory of movement. In the near term, the market will

keep an eye on the Union Budget for 2014-15 (Apr-Mar), likely to be presented in July.

Automobile manufacturers will hope the government to continue with the excise duty

cuts introduced in the interim budget.

Auto Stocks Outlook for the week - 19 to 23.May.2014

Auto Stocks Outlook for the week - 19 to 23.May.2014
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Stocks of most automobile companies are likely to move sideways next week

as euphoria over the Bharatiya Janata Party-led National Democratic Alliance's

victory in the Lok Sabha polls has been priced in. This week, in the run-up to

the announcement of the results yesterday, auto stocks rose 0.6-

12.5%. According to the Election Commission of India website, the NDA is

slated for a landslide victory. The general mood is that of optimism, but

fundamentally nothing is going to change in the auto space in the next few

months. Next week there could be some profit booking in some stocks. We've

seen some of that already yesterday.

The weak investment scenario of the past few years is likely to change with the

arrival of the new government. The new government would likely take several

bold steps to spur recovery in the infrastructure and manufacturing sector. As a

result, in the medium-to-long term, the automotive sector, and especially the

commercial vehicle segment is seen benefitting. Next week, Ashok Leyland

will be in focus, as the commercial vehicle manufacturer will detail its earnings

for Jan-Mar on Thursday.

We continue to prefer Maruti Suzuki India, Hero MotoCorp and Tata

Motors. However, Bajaj Auto, which detailed its Jan-Mar earnings on

Thursday, is likely to be subdued over the next few days. The motorcycle

maker disappointed the Street, posting a net profit of 7.64 bln rupees, down

0.2% year on year, and below expectations of 7.99 bln rupees.

Auto Stocks Outlook for the week - 05 to 09.May.2014

Auto Stocks Outlook for the week - 05 to 09.May.2014

Stocks of major automobile manufacturers are seen trading in a narrow range, but with a

negative bias in the week ahead, tracking the broader indices and also in reaction to the

dismal April sales performance. Hero MotoCorp Ltd's stock as their pick for the week on

the back of impressive sales in April.

Hero MotoCorp looks positive for the week the sales have been good...would be the pick

of the week in the auto space. The company reported a 14.4% on-year rise in sales at

571,045 units. The absence of any automobile manufacturer detailing earnings for Jan-

Mar during the coming week has kept sector-specific triggers out of the scene, and most

of the action is seen in line with the broader indices.

A minor negative bias is seen in trading for auto stocks next week due to two reasons--

mostly poor sales performance during the coming week, and the prospect of a below-par

monsoon in sight. A medium-term view, too, doesn't see automobile stocks

outperforming, due to the bad monsoon hampering the aim of the Reserve Bank of India

to bring down the consumer price-based inflation by January.

Unseasonal rains in parts of the country have impacted the winter crop negatively, and

hence tractor sales saw an on-year decline during April. Stocks of respective makers such

as Mahindra & Mahindra Ltd and Eicher Motors Ltd taking cues from the same, and

trading with a negative bias as a result.

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Auto Stocks Outlook for the week - 17.02.2014 - 21.02.2014

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 The interim Budget for 2014-15 to be presented Monday is likely to decide the course of automobile stocks next week. In case something like a better fiscal deficit number is announced, the auto stocks will rally along with all other stocks. Finance Minister P. Chidambaram will have a tightrope walk to do as he attempts to balance fiscal prudence with populism in an election year when he presents the interim Budget. The government aims at achieving the fiscal deficit target of 4.8% of gross domestic product for 2013-14 and to bring it down to 4.2% in 2014-15. The automobile industry, which is staring at a sales contraction for the second consecutive year in 2013-14, is seeking a lifeline from the government in terms of incentives. 

The Society of Indian Automobile Manufacturers has sought packages for the automobile sector in the interim Budget, primarily for commercial vehicles, including a fleet of modernisation policy. It feels automobiles are over-taxed currently, and hopes for a reduction in the same. SIAM has sought for a reduction in excise duty on passenger vehicles. Passenger car sales contracted for the fourth straight month in January even as manufacturers hoped for a better start to the new year. As the general sentiment prevailing among investors is that the budget is feudal, it is less likely to have an impact on specific stocks. But it is expected to create an impact at least for the first few days after the announcement. 

The full Budget will be presented by the next government, which comes to power after general elections slated for Apr-May. Some specific stocks like Tata Motors Ltd and Mahindra Ltd's stocks are seen trading with a positive bias next week on good results for the quarter ended December. 

Auto Stocks Outlook for the week - 10.02.2014 - 14.02.2014

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Stocks of major automobile manufacturers are likely to take cues from the unveiling of new products at the 12th Auto Expo, which started this week, and from the earnings for Oct-Dec slated to be out next week. Tata Motors Ltd and Mahindra & Mahindra Ltd will declare their Oct-Dec earnings on Monday and Friday, respectively. The much-awaited Auto Expo, that started Tuesday, saw many companies unveiling and launching products, on the first two days dedicated to the media and dealers. There are expectations of a few more launches in the four days left for the Auto Expo to conclude. Company's product launches on the occasion have sent a positive sentiment across the market, which is likely to continue next week. In what was perhaps the biggest event yet at the 12th Auto Expo, Maruti Suzuki India Ltd launched its much-awaited Celerio hatchback with a starting tag of 390,000 rupees, exshowroom Delhi. The hatchback has its top variant, with a manual transmission, priced at 496,000 rupees. It is a very important product, both for the company and the consumers. It has helped aid some positive sentiment. The stock is likely to trade with a positive bias for the next week. Similarly, Hero MotoCorp Ltd's counter is seen trading with a positive bias on product launches and future plans. The company unveiled three scooters, two of which are scheduled to be launched in the next financial year (Apr-Mar) at the Auto Expo Thursday. Hero MotoCorp has, over the past three days, unveiled several products including concept models, but has not launched any. The company, however, has shown intent on launching products on its own, for the first time since its tie-up with Honda Motorcycle ended in 2011. Tata Motors Ltd unveiled its Falcon series of vehicles a hatchback Bolt and a compact sedan Zest on Monday during the Auto Expo with plans to launch the models in the second half of 2014. At the Auto Expo, its UK-based subsidiary, the Jaguar Land Rover showcased the concept Jaguar CX-17 all-aluminium sport utility vehicle, which is likely to be commercially launched in 2015. The company will declare its results on Monday. Tata Motors Ltd's counter continues to be driven by the performance of its subsidiary JLR, which sold a record 425,000 cars globally during 2013, thereby providing a balm to the poor standalone domestic performance of the parent company. JLR contributes a lion's stock to the company's revenues. This month, the UK-based subsidiary's sales numbers are expected to be flat. Tata Motors December quarter results will not be a surprise. Mahindra & Mahindra Ltd will detail its results for Oct-Dec on Friday. The company's numbers should be mixed bag. Tractors side sale will shore up sales numbers. We expects the company to post revenue of 105 bln rupees for Oct-Dec and a net profit of 8.8 bln rupees with an EBITDA margin at 12.5%. It is also likely to trade with a positive bias next week.

Auto Stocks Outlook for the week - 03.01.2014 - 07.02.2014

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Stocks of major automobile manufacturers are likely to take cues from unveiling of new products at the 12th Auto Expo starting next week. The January sales numbers are also expected to drive the counter in the beginning of the week. The much-awaited Auto Expo has many an expectation to meet as companies are slated to launch a record 70 vehicles during the event, which will open for the media and traders Feb 5-6, and general public Feb 7-11.

Maruti Suzuki India Ltd, Hyundai Motor India, Tata Motors Ltd, Honda Cars India, and the Volkswagen Group are likely to showcase entire range of offerings. India's largest two-wheeler maker Hero MotoCorp is set to display as many as a dozen concept models, as well as the ones ready for commercial production soon.

Stocks of Tata Motors Ltd will track its earnings for the quarter ended December, to be declared on Feb 10. Net sales of the company are likely to grow 33% on year at 610 bln rupees during the reporting quarter. Tata Motors' sales for January are expected to be along its performance in the past few quarters--poor in the domestic market, good in the international market on the back of its subsidiary Jaguar Land Rover's performance. The sales numbers for January will be declared on Saturday. That will help some stocks move at the beginning of the week.

Auto Stocks Outlook for the week - 27.01.2014 - 31.01.2014

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Next week, stocks of major automobile manufacturers are expected to move in line with expectation of their respective Oct-Dec financial results and January sales numbers.  Maruti Suzuki India Ltd and Hero Motocorp Ltd will declare their earnings
for the quarter ending December on Tuesday and Thursday, respectively. By the end of the week, the expectations of January sales numbers will seep in.
    
Maruti Suzuki is likely to post a net profit of 6.64 bln rupees, up 33% on year aided by higher realisation on vehicle sales due to a price hike of around 1% in October. Maruti Suzuki in June announced the merger of its subsidiary Suzuki Powertrain with itself. Yesterday media reported that Maruti Suzuki plans to launch its the Celerio hatchback on Feb 6 at the Auto Expo. It is likely to trade with a positive bias.

Hero MotoCorp, the country's largest two-wheeler manufacturer, is seen reporting a 21% on-year rise in its Oct-Dec net profit to 5.90 bln rupees, aided by higher vehicle sales in the festivals season. The stock is also likely to trade with a positive bias. 

Tata Motors Ltd's counter continues to be driven by the performance of its subsidiary Jaguar Land Rover, which sold a record 425,000 car globally during 2013, thereby providing a balm to the poor standalone domestic performance of the parent company. Actual despatch figures will be out by the end of the week, so we expect stocks to move in anticipation of the numbers.
    
Tata Motors' sales for January are expected to be along its performance in the past few quarters--poor in the domestic market, good in the in the international market on the back of its subsidiary Jaguar Land Rover. JLR contributes a lion's share to the company's revenues. This month, the US-based subsidiary's sales numbers are expected to be flat. For Mahindra and Mahindra Ltd, the volumes are likely to dip overall year-on-year. The tractors sales numbers, being an exception, are seen moving up on year.

Auto Stocks Outlook for the week - 13.01.2014 - 17.01.2014

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Movement in shares of major auto companies will be stock-specific next week ahead of Oct-Dec quarterly results and are mostly expected to be range bound, as investors are seen refraining from taking large positions. The outlook for the auto companies' December quarter results will mostly drive the auto stocks.Companies will start declaring their financial results for the Oct-Dec from next week. It is going to be a mixed bag. It is somewhat stock specific for next week. Bajaj Auto Ltd is likely to announce its December quarter results on Thursday. The stock is likely to be range bound with a negative bias, highlighting that Bajaj Auto is likely to post 3-4% onyear growth in bottomline which is not very impressive if compared with Hero MotoCorp Ltd, which is expected to post a 20% growth. On a quarter-on-quarter basis, the company will see a decline in its margins because of volumes. The high-margin three-wheelers segment of Bajaj saw reduction in volumes during the quarter. Hero MotoCorp is likely to post numbers better than its peers. Tata Motors Ltd's subsidiary Jaguar Land Rover is expected to declare global sales numbers for December on Wednesday. The scrip of the company is seen trading with a positive bias in anticipation of high sales number. JLR has been the driving factor in Tata Motors' sales and earnings, on the back of which it has been performing decently. JLR (December numbers) should be good on the back of its Range Rover Sport variant. I am expecting around 38,000-39,000 vehicles sold globally. CRISIL yesterday raised Tata Motors' long-term bank facility rating to AA/stable, which might factor-in on Monday and the stock is likely to be positive on the news.  

Auto Stocks Outlook for the week - 06.01.2014 - 10.01.2014

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Stocks of major automakers are likely to take cues from the ongoing stock-specific trends, including December sales numbers, for the first few days next week, and will trade later in anticipation of the quarterly results. There is no news flow this week (for the automakers). The trading will mostly be stock-specific, depending upon the anticipated numbers to be given by various brokerage firms. Companies will start declaring their financial results for the Oct-Dec quarter from mid-January. For the first few days it will take cues from the current trade scenario that is going on after the December sales number release. The auto companies this week announced their December sales figures, after which the trade has been stock-specific in the sector. 

Most automakers performed poorly in December in terms of sales, with Maruti Suzuki India Ltd being an exception. Maruti Suzuki reported a growth of 5.5% on year to 86,613 units in domestic sales during the month of December. Mahindra & Mahindra Ltd's total automotive sales in December declined 13% from the year-ago period to 39,611 units. To be noted is the tractor sales of the company during the month, which rose 15% on year to 17,037 units, and once again outperformed the automotive division. Tata Motors Ltd sold a total 37,852 vehicles in December, down 42.3% on year, clearly below expectations. Its subsidiary Jaguar Land Rover's sales figures for December are expected to be announced next week, which will drive the stocks. 

JLR has been the driving factor in the company's sales and earnings on the back of which it has been performing decently. It is expected to register good numbers for December as well. Hero MotoCorp Ltd, India's largest two-wheeler manufacturer by sales, despatched 524,990 vehicles in December, a contraction of 3.1% on year. The company's sales during December saw the first on-year fall since June, when it had fallen 6%. Bajaj Auto Ltd sold a total of 297,776 units in December, down 13% from the 298,350 units sold last year in the same period. While the effect of the numbers have been factored in during the trading sessions of Thursday and Friday, the stock-specific sentiment is likely to continue next week also. 

Auto Stocks Outlook for the week - 30.12.2013 - 03.01.2014

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Stocks of major automakers are likely move along the expected sales number for respective companies till such announcements are made. Thereafter, the actual despatch figures and the broad market would guide the stocks. It is end of the month and auto sales numbers will come out on Wednesday which will be the key focus point. The broader market is another driver for the auto stocks. Many automakers have announced price hikes for their products, and new launches in the upcoming year. Both Tata Motors Ltd, the largest Indian automobile manufacturer in terms of turnover, and Maruti Suzuki India Ltd, the largest in terms of sales numbers, will hike prices of passenger vehicles from January, owing to rising input costs. 

This could account for some positive movement for the stocks next week. Another reason why the Maruti Suzuki scrip could trade positively, could be inferred from Chief Operating Officer - Marketing & Sales, Mayank Pareek's statement. The company will report its highest ever retail sales for a month in December on greater discounts and promotional offers on its vehicles. Maruti Suzuki is offering an average discount of 17,000 rupees on its vehicles, according to Pareek. Maruti Suzuki plans to launch a new hatchback in Feb-Mar. Launching a product is always good. If the company confirms the news then the stocks might trade with a positive bias. 

The scrip of Hero MotoCorp Ltd is likely to be positive for the next few weeks as the company is all set to launch a slew of motorcycles and also variants of the existing models January onwards. Bajaj Auto Ltd's scrip is among the top picks for the coming week because of strong rural demand for two-wheelers and also on expectations to deliver stable earnings for the ongoing quarter. Tata Motors' sales are expected to be along its performance in the past few quarters--poor in the domestic market, good in the in the international market on the back of its subsidiary Jaguar Land Rover. Therefore, it is likely to remain positive in the coming week, as sales from JLR's stable provide high margins to the company. 

However, the auto sector in entirety is not expected to deliver good sales figures for December. This comes despite auto companies offering huge discounts to its consumers during the month. The industry has witnessed slowdown in the past seven-eight months and continues to do so. Overall consumer sentiment has been low and demand has fallen over the months. The only respite to the sector has been the rural segment, which has seen good monsoon this year. On the murky sales outlook, most of the auto stocks are likely to trade with a partial negative bias next week.  

Auto Stocks Outlook for the week - 23.12.2013 - 27.12.2013

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Stocks of major automakers will move in line with the broader market on lack of any sector-specific triggers. There is nothing happening for the auto sector next week. We expect it to move broadly with the market. Stock indices are seen trading with a positive bias next week, but volatility is likely to persist ahead of the expiry of the December derivatives contract on Thursday.
    
There could be some sector-specific movement later in the week with the anticipation of sales numbers of automakers ongoing month.The broader market is also range-bound. The Nifty is seen finding support between 6100 and 6130 next week. Cogencis had reported, quoting sources, Tuesday that the Central Pollution Control Board was concerned over the pollution that the yet-to-be-launched quadricycle may cause. The regulatory body is also expected to put forth its concerns to its parent ministry soon, 

According to a source,Maruti Suzuki India Ltd plans to launch a new hatchback in February-March. Launching a product is always good. If the company confirms the news then the stocks might trade with a positive bias. The scrip of Hero MotoCorp Ltd is likely to be positive for the next few weeks as the company is all set to launch a slew of motorcycles and also variants of the existing models January onwards. Tata Motors Ltd's story looks promising in the near term as the company has shown good volumes and numbers on the back of its subsidiary Jaguar Land Rover

Auto Stocks Outlook for the week - 16.12.2013 - 20.12.2013

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Stocks of major automakers will move in line with the broader market, which is likely to move cautiously ahead of the Reserve Bank of India's mid-quarter monetary policy review. The RBI is scheduled to have its mid-quarter review of the monetary policy on Wednesday. Another factor likely to drive the markets is the US Federal Open Market Committee meeting on Dec 17 and 18 to discuss and debate on tapering of its bondbuying programme. Funds were coming into the emerging markets, now the US apex bank might control these measures. The Nifty and Sensex have already corrected. The trend is likely to continue next week. If Asian markets go down on fears of US Federal Reserve taper of bond-buying, then India is likely to fall in line with them. The inflation data out this week is quite dull, and, therefore, the RBI is most likely to hike rates, which will negatively impact the auto sector stocks. We expect the RBI to raise repo rate by 25 basis points. Most of the auto stocks are seen trading downwards. Hero MotorCorp Ltd still looks good among its two-wheeler peers on strong demand as rural demand is still growing. About 48-49% of sales are from rural areas. There could be some bottom-fishing in Hero MotorCorp's stock. The counter of Tata Motors Ltd is likely to trade sideways. Tata Motors' November global wholesale sale numbers were out yesterday. Although the company reported lower vehicle wholesale sales during November, falling 19.9% on year, its subsidiary Jaguar Land Rover's sales grew 15.3%, in line with the estimates. Analysts were expecting a 13-14% rise in the November vehicle sales in wholesale segment. JLR sold a total of 166 vehicles in India in November as against 178 units a year ago. The company's sales in India witnessed a decline for the first time in the last six months in November. However, on a cumulative basis, the company's sales in India have grown 23% in Jun-Nov to 1,333 vehicles in India. Its November US sales stood at 6,047 units, up 37% on year.

Auto Stocks Outlook for the week - 09.12.2013 - 13.12.2013

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Stocks of major automakers will move in line with the broader market, which will be highly influenced by the election results of four states to be out on Sunday. The election frenzy is going to drive the stocks, all stocks. Results of assembly elections of five states--Madhya Pradesh, Rajasthan, Chhattisgarh, Mizoram and Delhi--seen as the semi-finals before the general elections next year, are due to be out on Sunday and Monday. If the BJP (Bharatiya Janata Party) wins in three out of the five states also, the markets will rally. If that happens the auto stocks will rally too as the auto sector has high beta. 

We bet high on two-wheeler stocks as agri (agriculture) growth has been good and monsoon also. Bajaj Auto Ltd will trade range bound next week and will continue to lose to Honda Motorcycles Ltd in terms of sales in the near term. Hero MotorCorp Ltd is still good on numbers, and it will be positive for the next couple of weeks. It will have an edge over Bajaj Auto, Arora observed. If the various exit polls are to be believed, then a change in power is likely, which will see the markets rally. The markets will rally in the hope of better growth of the economy which in turn will make the auto sector grow. 

If the markets go up, then Maruti (Suzuki India Ltd) will be the first to rally. The counter of Mahindra & Mahindra Ltd is likely to trade range-bound. Its tractor business continues to do well, but the commercial vehicle segment is facing pressure. Tata Motors Ltd's subsidiary Jaguar Land Rover's November global vehicle sales are expected to be out next week. JLR sold a total of 166 vehicles in India in November as against 178 units a year ago. The company's sales in India witnessed a decline for the first time in the last six months in November. However, on a cumulative basis the company's sales in India have grown 23% in Jun-Nov to 1,333 vehicles in India. Its November US sales stood at 6,047 units, up 37% on year. The numbers of China and UK will now be the key drivers for the stock. Analysts are expecting a 13-14% rise in the November vehicle sales in wholesale segment.