Maruti, Ashok Leyland top picks in auto space: Mayuresh Joshi

In a chat with ET Now, Mayuresh Joshi, Fund Manager, Angel Broking, shares his view on the automobile space.
ET Now: What should one expect from the monthly auto sales numbers this time around? Does it seem like auto companies may see some uptick, considering festive season has now kicked in?

Mayuresh Joshi: Clearly, the expectations are running high for dispatch numbers. But within the auto pack, one really needs to differentiate between two-wheeler and four-wheeler makers. The volume growth for two-wheeler segment is something that can be a bit tepid going forward. If you just leave aside a couple of months for the festivities, this time around, the volume growth is going to disappoint a lot.

Within the four wheeler space, Maruti is a company where the earnings growth and, thus, the premium justification should continue.

Ashok Leyland is where we believe the long-term prospects are still intact. The light commercial vehicle (LCV segment) might be a weak link for the company this time around. We are extremely optimistic on Eicher Motors, thanks to the kind of dealer additions that Eicher is doing probably in the two-wheeler segment, its volume growth and strong extremely realisation.

The commercial vehicle (CV) segment remains extremely strong for Eicher Motors with Ebitda margin expansion quite evident. Overall, we have been extremely selective on auto stocks. Maruti, Ashok Leyland and Eicher Motors remain some of our favourite picks.