Auto Stocks Outlook for the Week – 27.02.2017 to 03.03.2017
Auto Stocks Outlook for the Week – 27.02.2017 to 03.03.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading with a slight positive bias next week, with twowheeler companies being in focus. Stocks of two-wheeler companies, such as Hero MotoCorp and Bajaj Auto, have not shown much movement after they announced earnings. So, next week we are expecting some uptick there. Pune-based Bajaj Auto had reported a net profit of 9.2 bln rupees for the December quarter, as against the consensus estimate of 8.5 bln rupees. India's largest two-wheeler manufacturer, Hero MotoCorp Ltd, had posted Oct-Dec net profit at 7.7 bln rupees, beating estimates of 6.9 bln rupees. The expected hit from the demonetisation of old 500-, and 1,000-rupee notes in November, which had led to a sharp fall in demand of motorcycles and scooters due to cash scarcity, was offset to an extent by lower input costs. In the long term bullish on commercial vehicle companies and two-wheeler makers. The commercial vehicle segment is seen getting immediate support from the purchases ahead of the rollout of Bharat Stage-IV emission norms on Apr 1. While two-wheeler makers are likely to see weak on-year growth in monthly sales numbers to be released in the first week of March, in the long-run, higher rural spend and gradual economic recovery are seen bringing demand back on track. In the Union Budget for 2017-18 (Apr-Mar) detailed early this month, the government increased the outlay for rural, agriculture and allied sectors and the rural job guarantee scheme and also offered incentives to crucial sectors like irrigation. These moves are seen boosting rural demand. Maruti Suzuki India Ltd is also looking good from a long-term perspective, with the company's 16-month old model, Baleno hatchback, having a waiting period of 24 weeks. Maruti's latest entrant, Ignis, is getting a lukewarm response but the popularity of its other models create a strong outlook for the automaker.
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Auto Stocks Outlook for the Week – 27.02.2017 to 03.03.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading with a slight positive bias next week, with twowheeler companies being in focus. Stocks of two-wheeler companies, such as Hero MotoCorp and Bajaj Auto, have not shown much movement after they announced earnings. So, next week we are expecting some uptick there. Pune-based Bajaj Auto had reported a net profit of 9.2 bln rupees for the December quarter, as against the consensus estimate of 8.5 bln rupees. India's largest two-wheeler manufacturer, Hero MotoCorp Ltd, had posted Oct-Dec net profit at 7.7 bln rupees, beating estimates of 6.9 bln rupees. The expected hit from the demonetisation of old 500-, and 1,000-rupee notes in November, which had led to a sharp fall in demand of motorcycles and scooters due to cash scarcity, was offset to an extent by lower input costs. In the long term bullish on commercial vehicle companies and two-wheeler makers. The commercial vehicle segment is seen getting immediate support from the purchases ahead of the rollout of Bharat Stage-IV emission norms on Apr 1. While two-wheeler makers are likely to see weak on-year growth in monthly sales numbers to be released in the first week of March, in the long-run, higher rural spend and gradual economic recovery are seen bringing demand back on track. In the Union Budget for 2017-18 (Apr-Mar) detailed early this month, the government increased the outlay for rural, agriculture and allied sectors and the rural job guarantee scheme and also offered incentives to crucial sectors like irrigation. These moves are seen boosting rural demand. Maruti Suzuki India Ltd is also looking good from a long-term perspective, with the company's 16-month old model, Baleno hatchback, having a waiting period of 24 weeks. Maruti's latest entrant, Ignis, is getting a lukewarm response but the popularity of its other models create a strong outlook for the automaker.