Strong rupee has led to euphoria in auto stocks: Jitendra Sriram

In a chat with ET Now, Jitendra Sriram, Director & Head of Research, HSBC Securities, shares his views on auto stocks. ET Now: If consumer spending is slowing down and if consumer spending is unlikely to pick up in the short term because of high inflation, what explains the underlying price action in the auto stocks?

Jitendra Sriram: Over the last two years, this entire sector has gone through a contractionary phase. Now, as people get more optimistic about a turnaround, if job creation starts picking up and if there is a CV cycle recovery coming in, there is clearly going to be some interest back onto the domestic consumer oriented and consumer discretionary names like autos.

The second part is specifically for certain names here, for example the currency strengthening has also helped in terms of the margin profiles which is where it is broadly leading to the euphoria at this sector.