M&M, Tata Motors best bet in auto sector: Gaurav Doshi, Morgan Stanley PWM

In a chat with ET Now, Gaurav Doshi, VP Equity Specialist, Morgan Stanley PWM, share his views on auto stocks.

ET Now: What about the dichotomy in the demand that two wheelers and four wheelers are currently seeing?

Gaurav Doshi: Just the fact that these companies have such a high base from last year, is going to be really hard to continue to grow. We are also seeing management come in and stem investors' expectations down. Ad spent for these companies whether it is two wheelers or four wheelers is turning out to be almost 3% to 4% of sales. We have interest rates that are inching higher. So this dichotomy may be an aberration right now but in general the trend will be that volumes will continue to move lower. Therefore, M&M which is more diversified or Tata Motors which has got global proxy in it will provide investors more safety versus Bajaj Auto, Hero Honda/Maruti play.

Our target price on Tata Motors would be in the range of about 1100 odd but post earnings we are going to see a lot of these numbers change.