Wait for corrections to accumulate auto stocks; 15-20% likely by this year-end

ET Now caught up with Ashit Suri, Fundamental Research Analyst, JV Capital Services, to get his views on the outlook of the auto pack.

Supply side concern is one major factor that Hero Honda is witnessing right now. Do you see any kind of pressures building up on margins for Hero Honda in the future?

Some amount of pressure on the margins is likely with increase in both raw material cost and interest rate that are coming up. But, I am still bullish on the auto space — Tata Motors and Bajaj Auto and Hero Honda. Valuations are at a fair value right now, but these companies are likely to perform well even going ahead. My advice would be to wait for corrections to accumulate the top stocks in the space and one could see returns of close to 15-20% by the year end on these stocks.