Four wheeler companies likely to see lower margins: P Phani Sekhar, Angel Broking

P Phani Sekhar, Fund Manager-PMS, Angel Broking, in a chat with ET Now, gives his views on auto stocks


How do you play autos now?

You are going to see lower margins before conditions stabilise in the four wheeler - both commercial and passenger vehicle space. To that extent I am not so sure if Maruti sales will be so much affected but its margins might be under serious threat especially considering the fact that after production disruptions the company will be very keen to gain on market share and cannot really keep stepping on price increases. As far as M&M is concerned they had one of their best months last month and I will be seriously surprised if they can build and maintain the momentum on the farm equipment side which has been the main story so that is something that one needs to be very carefully look at because valuations are not very comfortable out there.