Consumer auto stocks to benefit, if interest rates soften: Dhiraj Sachdev

In a chat with ET Now Dhiraj Sachdev, Senior VP & Fund Manager-Equities, HSBC Asset Management shares his views on the auto and auto ancillary sectors. Excerpts:

ET Now: One of your core portfolio positions is autos. Why are you still bullish on auto, because auto despatch numbers are clearly indicating that there is a big slowdown in the entire two-wheeler sector and the four-wheeler sector as well?

Dhiraj Sachdev: We have taken a view that if the interest rate cycle eventually moderates, then auto being an interest sensitive sector, we will be biased more on the consumer side of autos, which comprises of passenger vehicles, or two-wheelers or cars, rather than the industrial side, comprising of commercial vehicles. That is our view on last caps.

On the midcaps, we are fairly positive on the auto ancillaries which include tyre companies, which have better replacement demand and they may see margin expansion because of favourable rubber prices. So those are some of the specific calls on auto ancillaries.