Auto Stocks Outlook for the week – 25 to 29.01.2016
Seen
weak as correction likely to continue
( www.rupeedesk.in )
Stocks
on major automakers are expected to continue seeing weakness next week and
may
fall if the benchmark indices go down further. Stocks of most major auto
companies
remained flat this week, after trading weak for a couple of days. Only
Maruti
Suzuki continued its downward trend and closed further down 3%. The stock
is
likely to trade down next week as well. The stock could see some uptick after
Jan
28
when it announces Oct-Dec earnings. Analysts have pegged its bottomline
climbing
by 69% on year to 13.57 bln rupees for the quarter, aided by a growth in
sales
and substantially better margins.
In
the long run, Maruti continues to look positive even as the company prepares
for
the
launch of its compact sport utility vehicle Ignis. The company will also
benefit
from
falling commodity prices. Bajaj Auto, on the other hand, rallied yesterday and
closed
up 2.02% from its close Thursday. Tata Motors will see correction after
yesterday's
rally, which was aided by its subsidiary Jaguar Land Rover becoming the
largest
auto producer in the UK. The stock may face headwinds as fears of its
correlation
with China and other markets mount. JLR has significant exposure in
China,
which is its second-largest sales territory.