Auto Stocks Outlook for the week – 03 to 07.04.2017
Auto Stocks Outlook for the week – 03 to 07.04.2017
( www.rupeedesk.in )
Nifty Auto index is seen rising next week are bullish on the segment and expect shares of most auto
companies to trade with a positive bias. The Supreme Court order banning sale of Bharat Stage-III
compliant vehicles from Apr 1 is likely to cause only a short-term disruption.
The SC order was just a short-term disruption. Stock of worst-hit companies like Ashok Leyland and Tata Motors has already shown a recovery yesterday. The Society of Indian Automobile Manufacturers called the Supreme Court decision "unfair" and said it will cause undue stress to the industry. India's largest commercial vehicle maker, Tata Motors Ltd, said the "unexpected and unprecedented" decision will cause material impact to the\ entire automotive industry, original equipment manufacturers, and dealerships. With no time left to clear the inventory, companies have formed alternative strategy. Ashok Leyland Ltd said it will export the inventory to markets which have norms similar to BS-III, or may also upgrade them to BS-IV at minimal cost. Tata Motors, which derives nearly 100% of its profits from subsidiary Jaguar Land Rover, would not see any long-term effect of this move. The move will lead to small write-offs for these companies. But, this effect can also be minimized with exporting that inventory, converting them to BS-IV, or even dismantling and using the parts again. Stocks of India's largest two-wheeler manufacturer, Hero MotoCotp Ltd, had also taken a hit after the Supreme Court order. The company is sitting on an inventory of 320,000 two-wheelers, according to various industry insiders. The two-wheeler maker, along with its peers Bajaj Auto Ltd, also welcomed the move and said that it had planned a proactive approach to switch to BS-IV compliant prod.
Source : Cogencis Information Services Ltd.
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Auto Stocks Outlook for the week – 03 to 07.04.2017
( www.rupeedesk.in )
Nifty Auto index is seen rising next week are bullish on the segment and expect shares of most auto
companies to trade with a positive bias. The Supreme Court order banning sale of Bharat Stage-III
compliant vehicles from Apr 1 is likely to cause only a short-term disruption.
The SC order was just a short-term disruption. Stock of worst-hit companies like Ashok Leyland and Tata Motors has already shown a recovery yesterday. The Society of Indian Automobile Manufacturers called the Supreme Court decision "unfair" and said it will cause undue stress to the industry. India's largest commercial vehicle maker, Tata Motors Ltd, said the "unexpected and unprecedented" decision will cause material impact to the\ entire automotive industry, original equipment manufacturers, and dealerships. With no time left to clear the inventory, companies have formed alternative strategy. Ashok Leyland Ltd said it will export the inventory to markets which have norms similar to BS-III, or may also upgrade them to BS-IV at minimal cost. Tata Motors, which derives nearly 100% of its profits from subsidiary Jaguar Land Rover, would not see any long-term effect of this move. The move will lead to small write-offs for these companies. But, this effect can also be minimized with exporting that inventory, converting them to BS-IV, or even dismantling and using the parts again. Stocks of India's largest two-wheeler manufacturer, Hero MotoCotp Ltd, had also taken a hit after the Supreme Court order. The company is sitting on an inventory of 320,000 two-wheelers, according to various industry insiders. The two-wheeler maker, along with its peers Bajaj Auto Ltd, also welcomed the move and said that it had planned a proactive approach to switch to BS-IV compliant prod.
Source : Cogencis Information Services Ltd.