Buy auto stocks at corrective levels on downside: Deven Choksey

Deven Choksey, MD, KR Choksey Securities, talks to ET Now on auto stocks.

What did you make of the trends that we saw from the auto pack yesterday? On one hand you had Bajaj and TVS, which massively disappointed with their monthly performance. Hero MotoCorp did well and so did Tata Motors on a relative basis, Maruti as well as Ashok Leyland?

These numbers do not give a proper indication. Many a times we find that due to peculiar behaviour of the consumer and at the same time the peculiar behaviour of the consumer at the end of the year would probably confuse you as far as the trend is concerned on the numbers side.

In my mind if we consider December month as an aberration and if we consider that in this particular month, some amount of slowdown slow off take was expected due to a long vacation season and also be the factor that most of the consumers believe that there is a pressure on their inventory, so they will reduce the prices or give higher discounts, so they postponed their buying decision to January or February, so to my mind the demand is still there into the system.

You should see better numbers coming out. Of course particularly companies like Tata Motors, the JLR portfolio is certainly going to help them at the end of this year to show a better performance. Even their domestic portfolio on commercial vehicle side has been showing a distinctly better trend because of a) the loss of Maruti's production and b) some of the other internals on which they worked particularly in strengthening their product platforms, that is where they have probably scored better numbers.

I would think that auto numbers would by and large remain satisfactory in the coming year, though there maybe some amount of pressure in companies like Bajaj Auto may not be able to meet the targeted numbers but still they would be better than last year, so would consider that any fall coming in due to that could create a headroom for an upside into the auto stocks, so buy at corrective levels on downside.