M&M to be most affected carmaker post SC's diesel vehicle ruling: Deven Choksey, KR Choksey Investment

In a chat with ET Now, Deven Choksey, KR Choksey Investment, talks about the SC ruling on diesel vehicles. Excerpts:

ET Now: Are markets pricing in this the SC ruling already? Maruti is up, Mahindra & Mahindra is down?

Deven Choksey: Almost 100% of vehicles produced by Mahindra & Mahindra are getting affected, followed by those of Tata Motors. For the same reasion, Mercedes, Audi and BMW are also getting affected significantly.

Delhi accounts for about 7% of total passenger car sales in India. So, the impact is going to be significant to this company.

This is going to take a toll on the business of the company, at least in the near future if not for good. The market will be very unhappy about it.

M&M is certainly going to be the worst-affected company in the entire space. The larger part of their business comes out of diesel. Though Delhi is just one city, this ruling will affect their business for sure.

One is, however, not very sure how this ruling will be implemented. Vehicles can still be registered in Delhi's neighbouring states like Haryana, Chandigarh and Punjab. There is nothing to stop these vehicles from plying in Delhi. So the implementation part is still in doubt.

My personal view is that a sufficient amount of time should have been given to the industry before this ruling. A road map should have been laid out priorly. It is unfortunate that India is prone to knee-jerk reactions.