Auto ancillaries will do well: Devesh Kumar

Devesh Kumar, Head Equities India, RBS

What are your thoughts on auto stocks and what are your thoughts on auto ancillary stocks?

On auto stocks, we are positive on two wheelers and on commercial vehicles. We feel that these two sectors will continue to do well whereas passenger cars, in that space we feel that there will be some pressure because of rising interest rates, rising costs and pressure on margins.

Auto ancillaries wherever they are dependent on large replacement demand, they will do well but pure OEM suppliers, there we will find that there will be some pressure on their top line, so our recommendation is two wheelers, commercial vehicles and ancillaries where replacement demand is strong.