GOLDEN RULES FOR TRADING

Auto Stocks Outlook for the week – 08 to 12.08.2016 To take cues from Jul sales data, companies' earnings

Auto Stocks Outlook for the week – 08 to 12.08.2016
To take cues from Jul sales data, companies' earnings

Stocks of major automobile companies are seen taking cues from earnings for the Apr-Jun quarter,
scheduled to be announced next week. The bias for auto stocks remains positive in view of healthy
sales numbers and expectations of a turnaround in demand driven by a good monsoon so far this
season. The CNX Auto Index, which closed at 9738.65 points yesterday, up nearly 3% on a weekly
basis, may test 9900 points soon. Next week, Hero MotoCorp and Mahindra and Mahindra will be in
focus following their earnings announcements. While Hero MotoCorp would detail its earnings on
Monday, Mahindra and Mahindra would announce earnings on Wednesday.

Hero MotoCorp, which closed the week up 7%, may go past 3,500 rupees, driven by bullish earnings.
The company's Apr-Jun net profit is seen rising 12.6% on year to 8.4 bln rupees due to a likely rise in
sales of two-wheeler maker and soft commodity prices. Aided by Hero MotoCorp, the market is seen
likely to be bullish on stocks of other two-wheeler makers, considering an expected turnaround in
rural demand. The Mumbai-based automaker's bottom line is at 8.8 bln rupees for Apr-Jun,
marginally higher than 8.5 bln rupees in the same quarter a year ago.