Auto stocks are going to run out of a bit of momentum steam: Sajiv Dhawan
At current levels auto stocks are going to run out of a bit of momentum steam: Sajiv Dhawan, MD, JV Capital Services.
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| At current levels auto stocks are going to run out of a bit of momentum steam: Sajiv Dhawan, MD, JV Capital Services.
Maruti, the deal that happened yesterday with Volkswagen picking up stake in Suzuki Motors, would
you react positively for Maruti Suzuki in India?
Yes, obviously positive kickback and from a sentiment perspective, there will be hope that obviously we will get some technical and knowledge experience even further in certain areas but the sector as a whole which has had a very-very good run up, sales figures continue to be strong and robust, the only worry is that valuations are on the higher side. The sector has become more for momentum traders but even that momentum seems to be dying down a little bit.
Results for the coming quarter are likely also to be very good but the problems will come from next couple of quarters as the fear of higher interest rates, if the global economies continue the recovery then the possibility of higher input costs. So that might spoil the party for these stocks from maybe in January to February next year but on the short term when not really looking at the stock from an investment’s perspective, more from a momentum call stocks you prefer in that sector would be Hero Honda or a Bajaj Auto.
One quick question on the auto pack, there is so much news surrounding all of the stocks there, Tata Motors wanting to acquire Sumitomo’s stake in Swaraj Mazda, you already have the Volkswagen news of taking stake in Suzuki, what that would mean for India, all of this news you expected to play out on stocks now?
Maruti, the deal that happened yesterday with Volkswagen picking up stake in Suzuki Motors, would
you react positively for Maruti Suzuki in India?
Yes, obviously positive kickback and from a sentiment perspective, there will be hope that obviously we will get some technical and knowledge experience even further in certain areas but the sector as a whole which has had a very-very good run up, sales figures continue to be strong and robust, the only worry is that valuations are on the higher side. The sector has become more for momentum traders but even that momentum seems to be dying down a little bit.
Results for the coming quarter are likely also to be very good but the problems will come from next couple of quarters as the fear of higher interest rates, if the global economies continue the recovery then the possibility of higher input costs. So that might spoil the party for these stocks from maybe in January to February next year but on the short term when not really looking at the stock from an investment’s perspective, more from a momentum call stocks you prefer in that sector would be Hero Honda or a Bajaj Auto.
One quick question on the auto pack, there is so much news surrounding all of the stocks there, Tata Motors wanting to acquire Sumitomo’s stake in Swaraj Mazda, you already have the Volkswagen news of taking stake in Suzuki, what that would mean for India, all of this news you expected to play out on stocks now?
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I say that it is very positive news for the stocks over the medium to longer term but stocks had had a very good run up on the back of good sales figures which keep coming in month on month and the sector has got re-rated across the board and even currently a lot of the stocks have price targets maybe 10 to 20% higher. Firstly I feel the stocks are probably going to run out of a bit of momentum steam at the current levels based on valuations. If there is a substantial correction which could be at least 10% and one could look to probably accumulate the stocks again with a longer term perspective but the stocks we do feel still have decent upside and which are worth investor is looking into at lower levels again would be Bajaj Auto and Hero Honda, two companies which have done very well and even in negative markets as a whole have rewarded shareholders pretty well.Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
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