Rate tightening could hurt the auto sector: Raamdeo Agarwal

Raamdeo Agarwal, MD, Motilal Oswal Financial Securities in an interview with ET Now talks about the auto industry.

What’s your thought for the entire auto sector? We have seen year to date this sector has been one of the best performers. Now, with commodity prices cooling off some bit of pricing pressure and price hikes also kicking in, do you still think from a stock market perspective it is a good investment bet?

It looks like selectively. The only danger I see is that there could be extra tightening. Economy is on absolute fire. Revenue collections are very buoyant but I think the real danger is inflation.

Inflation is running in double digits post October. It is supposed to come down to 5%-6%. If that were not to happen, we might see a spike in the interest rate. So if we do not have that kind of danger, I think auto is in tremendous shape right now.