Auto Stocks Outlook for the week – 26 to 30.10.2015
In
range with positive bias; Jul-Sep result eyed
( www.rupeedesk.in )
Stocks
of major automobile companies are expected to trade range bound, but the bias
is
seen
positive, with Jul-Sep earnings of two major automakers and three auto
component
makers--slated
to be detailed next week--dictating the trajectory. Maruti Suzuki India, the
country's
largest passenger carmaker, will detail its earnings on Tuesday, as will
Chennai-based
TVS Motor Co. Automotive battery makers Exide Industries and Amara
Raja
Batteries will declare their earnings on Wednesday, while tyre maker MRF will
detail
its earnings on Thursday. Maruti Suzuki India is seen reporting a 48% on-year
rise
in
net profit for the September quarter to 12.75 bln rupees, aided by higher
vehicle sales
volume.
Earnings
of auto companies Hero MotoCorp and Bajaj Auto have been better than market
expectations
on certain parameters such net profit and operating margin expansion, which
has
brightened brokerages' view on their stocks, and may lead them to gain ground
in the
near
term. We expect a 10-15% run up in the share prices of the two companies over
the
next
12 months. Most immediately, the two companies are likely to see a sales volume
increase
across vehicle segments on the back of the on going festival season.