Auto Stocks Outlook for the week – 20 to 24.02.2017
Auto Stocks Outlook for the week – 20 to 24.02.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading with a positive bias next week, with TVS Motor Co Ltd expected to perform the best among the pack. Investors are bullish on TVS Motor as it has emerged as the strongest of the two-wheeler companies in the December quarter earnings and has also been posting robust sales of mopeds in monthly figures. While Chennai-based TVS Motor reported a 10% year-on-year jump in net profit for the quarter ended Dec 31, Hero MotoCorp Ltd and Bajaj Auto Ltd had posted weak earnings for the period. Demonetisation of old 500-, and 1,000-rupee notes on Nov 8 had led to a sharp fall in demand of motorcycles and scooters due to cash scarcity, especially in smaller towns and cities. Two wheelers and commercial vehicles were two of the worst hit automobile segments following demonetisation. Tata Motors Ltd reported weak Oct-Dec earnings and disappointed investors, but analysts maintain the stock will remain strong in the long term due to expectation of revival in volume momentum on the back of a strong launch pipeline. The company had reported a sharp 96.8% year-on-year fall in consolidated net profit to 937.7 mln rupees, much below the consensus estimate. Going ahead, the company's commercial vehicle business is also likely to benefit from the government's 3.96-trln-rupee budgetary plan for the infrastructure sector. Other companies such as Mahindra & Mahindra Ltd, which have a large rural presence due to substantial farm equipment business, are also expected to benefit from more government expenditure towards revival of infrastructure and rural economy. Early this month, the government had announced a budgetary allocation of 1.87 trln rupees for rural, agriculture, and allied sectors. Two-wheeler companies, which have a large dependency on cash-driven economy, are also likely to be aided by high rural spend. Stocks of India's largest passenger carmaker, Maruti Suzuki India Ltd, are seen moving higher. Hero MotoCorp is seen range-bound in the next week. Stocks of Tata Motors are likely to remain under pressure next week due to lower-thanexpected earnings.
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Auto Stocks Outlook for the week – 20 to 24.02.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading with a positive bias next week, with TVS Motor Co Ltd expected to perform the best among the pack. Investors are bullish on TVS Motor as it has emerged as the strongest of the two-wheeler companies in the December quarter earnings and has also been posting robust sales of mopeds in monthly figures. While Chennai-based TVS Motor reported a 10% year-on-year jump in net profit for the quarter ended Dec 31, Hero MotoCorp Ltd and Bajaj Auto Ltd had posted weak earnings for the period. Demonetisation of old 500-, and 1,000-rupee notes on Nov 8 had led to a sharp fall in demand of motorcycles and scooters due to cash scarcity, especially in smaller towns and cities. Two wheelers and commercial vehicles were two of the worst hit automobile segments following demonetisation. Tata Motors Ltd reported weak Oct-Dec earnings and disappointed investors, but analysts maintain the stock will remain strong in the long term due to expectation of revival in volume momentum on the back of a strong launch pipeline. The company had reported a sharp 96.8% year-on-year fall in consolidated net profit to 937.7 mln rupees, much below the consensus estimate. Going ahead, the company's commercial vehicle business is also likely to benefit from the government's 3.96-trln-rupee budgetary plan for the infrastructure sector. Other companies such as Mahindra & Mahindra Ltd, which have a large rural presence due to substantial farm equipment business, are also expected to benefit from more government expenditure towards revival of infrastructure and rural economy. Early this month, the government had announced a budgetary allocation of 1.87 trln rupees for rural, agriculture, and allied sectors. Two-wheeler companies, which have a large dependency on cash-driven economy, are also likely to be aided by high rural spend. Stocks of India's largest passenger carmaker, Maruti Suzuki India Ltd, are seen moving higher. Hero MotoCorp is seen range-bound in the next week. Stocks of Tata Motors are likely to remain under pressure next week due to lower-thanexpected earnings.
