Mahindra & Mahindra a top pick: Abhijit Chakraborty, Fortune Financial Services India Ltd
Excise duty, which was expected widely to be increased, has not been tinkered with in the budget.
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| Abhijit Chakraborty, Sr. VP, Institutional Equities, Fortune Financial Services India Ltd, in a chat with ET Now talks about auto stocks and Mahindra & Mahindra.
What’s your call on the auto stocks? Does it seem like most of these are running with limited upside and more downside?
This year - beginning of the year - the autos have gone through a severe correction because the volume expectations were much lower than last year and the other headwinds - the interest rates and oil prices - are also adding to that correction phase. But what we have seen in the budget is that the excise duty, which was expected widely to be increased, has not been tinkered with which is a positive.
The thing that has gone positive in favour of the automobile stocks is the fact that there has been a huge focus in increasing the expenditure towards the rural and agricultural sector whether it is linking the NREGA to inflation index, increasing salary of aanganwadi employees and overall increase in the primary lending target by about 1 lakh crores. These are very substantial steps taken to ensure that the rural consumption demands remain intact.
So I feel that stocks like Mahindra & Mahindra, which are a direct play on the agricultural sector, benefit thereon. a
What’s your call on the auto stocks? Does it seem like most of these are running with limited upside and more downside?
This year - beginning of the year - the autos have gone through a severe correction because the volume expectations were much lower than last year and the other headwinds - the interest rates and oil prices - are also adding to that correction phase. But what we have seen in the budget is that the excise duty, which was expected widely to be increased, has not been tinkered with which is a positive.
The thing that has gone positive in favour of the automobile stocks is the fact that there has been a huge focus in increasing the expenditure towards the rural and agricultural sector whether it is linking the NREGA to inflation index, increasing salary of aanganwadi employees and overall increase in the primary lending target by about 1 lakh crores. These are very substantial steps taken to ensure that the rural consumption demands remain intact.
So I feel that stocks like Mahindra & Mahindra, which are a direct play on the agricultural sector, benefit thereon. a
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