GOLDEN RULES FOR TRADING

Auto Stocks Outlook for the week – 08 to 11.03.2016 Seen remain positive next week

Auto Stocks Outlook for the week – 08 to 11.03.2016

Sentiment for stocks of major auto companies is likely to remain positive next week,
despite Budget setbacks, after most of them posted better-than-expected production
and sales numbers for February. While sales of medium and heavy commercial
vehicles continued growing in double digits in February, two wheelers manufacturers
reported healthy year-on-year growth.

Among Nifty 50 auto companies, sales of majority of vehicle makers rose
in February. Among four-wheeler manufacturers, total sales of Tata Motors rose 6%
on year in February, while Mahindra and Mahindra reported a rise of 16% in volume.
Total sales of India's largest carmaker Maruti Suzuki India, however, fell 1% due to
an agitation in Haryana where its manufacturing plants are located.

Both the two-wheeler makers in Nifty 50 reported positive sales growth with Bajaj
Auto's total sales rising 12% on year and market leader Hero MotoCorp's volume
rising 13.6%.

Investors would watch for product price hikes by more manufacturers following a 1-
4% infrastructure cess on vehicles announced in the Union Budget for 2016-17 (Apr-
Mar) on Monday. Already Maruti Suzuki India Ltd, Mahindra Mahindra Ltd and
Tata Motors Ltd have announced a hike in vehicle prices.

In his Budget speech, Finance Minister Arun Jaitley announced the levy of an
infrastructure cess of 1% on small cars, 2.5% on diesel cars, and 4% on vehicles with
higher engine capacity and sport utility vehicles.