Diesel vehicle ban in Delhi may affect auto stocks sentimentally: Deven Choksey

In an interview to ET Now, Deven Choksey of KR Choksey Investment Managers, says that if other states also start taking cues from Delhi and ban diesel vehicles, it might lead to a disaster for many automobile companies.

ET Now: Do you think auto stocks would remain under pressure after Delhi bans diesel vehicles? What would be its effect on companies like Mahindra & Mahindra, which are big manufactures of diesel vehicles?

Deven Choksey: Yes, I would say that auto stocks would continue to be under pressure, even if it is sentimental. If some other states also start taking cues from Delhi, it could lead to a disaster for many of the automobile companies, particularly diesel manufacturers. Along with that, the entire ecosystem would get affected because you have the ancillaries, which are basically supporting this entire growth in the automobile space. If the diesel ban comes in, probably you are going to see even the effect coming on to the ancillaries.

It may not have an immediate effect on the company’s performance but eventually, if this continues, we might see a negative impact on some of the auto companies. We will have to watch out on this subject before concluding anything on the negative side.