Auto Stocks Outlook for the week - 23 to 27.03.2015
( www.rupeedesk.in )
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.
