Auto Stocks
Outlook for the week – 22 to 26.12.2014
( www.rupeedesk.in )
Stocks of leading automobile
manufacturing companies are seen moving in a narrow range next
week, adding that some key stocks
such as Mahindra & Mahindra and Tata Motors may witness
further correction. Both these
companies have reported a fall in vehicle dispatches to dealers
over the past few months.
Stocks of Bajaj Auto are seen
rising in the coming few sessions as the company has won an order
to supply 125,000 units of its
Discover-125M motorcycle to the Sri Lankan government, which
the company expects to complete
over the next three to four months.
We expect two-wheeler companies'
stocks to do better than scrips of four-wheeler and
commercial vehicle manufacturers,
mainly due to sustained demand for their products. Demand
for two-wheelers, particularly
scooters, is seen remaining at sustained levels. Scooters sales have
been growing month-on-month for
over the past two years led by demand in urban India.
Therefore, are positive on Hero
MotoCorp and TVS Motor Co. Hero MotoCorp is the secondlargest
player in the scooters segment,
while TVS Motor Co is the third largest. Hero MotoCorp's
renewed focus on exports, apart
from sustained domestic two wheeler demand has led to positivity around its stocks.
