Cautious on four-wheeler stocks including Maruti Suzuki: IV Subramaniam

In a chat with ET Now, IV Subramaniam, MD & CIO, Quantum Advisors, shares his view on the automobile space.

ET Now: Do you believe that there is some solid upside potential in store for auto stocks such Eicher Motors and Hero MotoCorp?

IV Subramaniam: If you look at stocks of two-wheeler companies like Bajaj Auto and Hero MotoCorp, we still think that there is lot of upside potential.

These companies may have reported tepid sales growth for the March quarter, but the long-term thesis remains intact. The public transportation in India is poor. We are seeing development of new cities, there are huge job opportunities. To grab such opportunities, one needs better transportation facility. Both Hero MotoCorp and Bajaj Auto could see rise in demand.

Given the decline in stock prices, even the valuations now look attractive to us.

Meanwhile, we have commercial vehicle companies and a mix like Eicher Motors, which looks a little expensive to us. Although the sales growth for Eicher Motors have been very strong, we are little cautious in such companies. Similar is the case with Maruti Suzuki. Overall, we are more positive on two-wheeler and cautious on the four-wheeler space.