Auto stocks vroom on robust sales
Listed biggies like Tata Motors, Mahindra & Mahindra, Bajaj Auto and Ashok Leyland registered their new 52-week high at BSE on Wednesday.
By Rajesh Chandramouli, TNN |
CHENNAI: With the Indian motown buzzing with robust sales, the stocks of automotive manufacturers are sizzling at the bourses. Listed biggies like Tata Motors, Mahindra & Mahindra, Bajaj Auto and Ashok Leyland registered their new 52-week high at BSE on Wednesday.
The returns delivered by auto companies are handsome too. India’s largest truck maker Tata Motors has managed a 29.16% return in the past month. The stock closed at Rs 729.75 after touching a new high of Rs 739.45, while it was only around Rs 565 a month ago. Ashok Leyland touched Rs 55.65 on Wednesday netting a monthly gain of 19.80%.
Two-wheeler maker Bajaj Auto too had a wonderful Wednesday when its stock peaked Rs 1,699. This counter has returned a heady 21.05% in the past month. Mahindra & Mahindra recorded a monthly gain of 15.66%. This stock scaled the Rs 1,098.70 peak, a new high this year. Market leader Maruti Suzuki has returned 9.22% in the past month while Hero Honda Motors has returned 8.31%. In the past month sensex has returned 11.45%.
“The main reason behind the upward movement in the auto sector has been the robust sales numbers posted by these companies. The growth in the sales numbers has been improving on a month-on-month basis, thus even though the current y-o-y growth is high on back of the lower base of the last corresponding period, the underlying growth trend is intact,” said Sarabjit Kour Nangra, vice-president (Research ), Angel Broking.
“We remain bullish on the sector, however on back of strong run-up witnessed in the space, we would recommend investors to buy the stocks at dip.”
“With some manufacturers (GM, Toyota ) saying they are effecting a price hike, others will also follow suit. Any hike in prices would help companies shore up their bottom line,” said an analyst with a mutual fund.
“Even as bullishness remain in the sector, it needs to be seen against the backdrop of the government stimulus which is to be withdrawn soon and with imminent increase in interest rates, it is safe to assume that this stupendous growth may not sustain.”
The returns delivered by auto companies are handsome too. India’s largest truck maker Tata Motors has managed a 29.16% return in the past month. The stock closed at Rs 729.75 after touching a new high of Rs 739.45, while it was only around Rs 565 a month ago. Ashok Leyland touched Rs 55.65 on Wednesday netting a monthly gain of 19.80%.
Two-wheeler maker Bajaj Auto too had a wonderful Wednesday when its stock peaked Rs 1,699. This counter has returned a heady 21.05% in the past month. Mahindra & Mahindra recorded a monthly gain of 15.66%. This stock scaled the Rs 1,098.70 peak, a new high this year. Market leader Maruti Suzuki has returned 9.22% in the past month while Hero Honda Motors has returned 8.31%. In the past month sensex has returned 11.45%.
“The main reason behind the upward movement in the auto sector has been the robust sales numbers posted by these companies. The growth in the sales numbers has been improving on a month-on-month basis, thus even though the current y-o-y growth is high on back of the lower base of the last corresponding period, the underlying growth trend is intact,” said Sarabjit Kour Nangra, vice-president (Research ), Angel Broking.
“We remain bullish on the sector, however on back of strong run-up witnessed in the space, we would recommend investors to buy the stocks at dip.”
“With some manufacturers (GM, Toyota ) saying they are effecting a price hike, others will also follow suit. Any hike in prices would help companies shore up their bottom line,” said an analyst with a mutual fund.
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“Even as bullishness remain in the sector, it needs to be seen against the backdrop of the government stimulus which is to be withdrawn soon and with imminent increase in interest rates, it is safe to assume that this stupendous growth may not sustain.”
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