Auto Stocks Outlook for the week – 10 to 14.04.2017
Auto Stocks Outlook for the week – 10 to 14.04.2017
( www.rupeedesk.in )
Stocks of most automobile companies are expected to rise next week as analysts remain upbeat on the sector on the back of companies reporting strong monthly sales volumes for March. Maruti Suzuki India Ltd continues to be the top pick for most analysts due to a nearly 10% on-year growth in annual sales for 2016-17 (Apr-Mar), and because of high demand for Vitara Brezza sport utility vehicle and the Baleno hatchback. We continue to prefer Maruti Suzuki in the automotive space, given the sustained demand for its products, leading to a consistent rise in market share. In the two-wheeler segment, TVS Motor Co Ltd has emerged as a star performer, with a nearly 11% on-year growth in sales volume for March at 250,979 units. We also like TVS Motor due to the lower impact of demonetisation on its portfolio and its tie-up with BMW which would enable it to gain a foothold in the premium motorcycle space and improve margins. With gradual improvement in cash availability on the ground level, especially in rural areas, outlook for Hero MotoCorp Ltd also looks positive. Hero MotoCorp March volumes surprised positively and grew 1% YoY (year-on-year) and 16% MoM (month-on-month) to nearly 610,000 units, despite the impending Supreme Court verdict on BS-III inventory likely impacting dispatches in the last two weeks. The country's largest two-wheeler manufacturer, with a large rural presence, is also expected to benefit from the 1.87 trln rupees worth of rural spending allocated under the Budget for 2017-18. Higher rural spending is likely to aid growth of commercial vehicles. While commercial vehicle manufacturers did not witness the expected pre-buying of Bharat Stage III-compliant vehicles before the Apr 1 deadline, the segment is likely to see 6-8% growth in the current financial year that started Apr 1, ICRA Research said in a report. Potential implementation of fleet modernisation or scrappage programme and higher demand from consumption-driven sectors, especially for LCVs (light commercial vehicles) and ICVs (intermediate commercial vehicles) will also aid the segment. Next week, the Nifty Auto index is seen rising due to strong upward momentum across the segment. Maruti Suzuki's stocks are expected to remain in focus on the back of strong sales for the last fiscal and strong demand for Vitara Brezza.
Source : Cogencis Information Services Ltd.
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Auto Stocks Outlook for the week – 10 to 14.04.2017
( www.rupeedesk.in )
Stocks of most automobile companies are expected to rise next week as analysts remain upbeat on the sector on the back of companies reporting strong monthly sales volumes for March. Maruti Suzuki India Ltd continues to be the top pick for most analysts due to a nearly 10% on-year growth in annual sales for 2016-17 (Apr-Mar), and because of high demand for Vitara Brezza sport utility vehicle and the Baleno hatchback. We continue to prefer Maruti Suzuki in the automotive space, given the sustained demand for its products, leading to a consistent rise in market share. In the two-wheeler segment, TVS Motor Co Ltd has emerged as a star performer, with a nearly 11% on-year growth in sales volume for March at 250,979 units. We also like TVS Motor due to the lower impact of demonetisation on its portfolio and its tie-up with BMW which would enable it to gain a foothold in the premium motorcycle space and improve margins. With gradual improvement in cash availability on the ground level, especially in rural areas, outlook for Hero MotoCorp Ltd also looks positive. Hero MotoCorp March volumes surprised positively and grew 1% YoY (year-on-year) and 16% MoM (month-on-month) to nearly 610,000 units, despite the impending Supreme Court verdict on BS-III inventory likely impacting dispatches in the last two weeks. The country's largest two-wheeler manufacturer, with a large rural presence, is also expected to benefit from the 1.87 trln rupees worth of rural spending allocated under the Budget for 2017-18. Higher rural spending is likely to aid growth of commercial vehicles. While commercial vehicle manufacturers did not witness the expected pre-buying of Bharat Stage III-compliant vehicles before the Apr 1 deadline, the segment is likely to see 6-8% growth in the current financial year that started Apr 1, ICRA Research said in a report. Potential implementation of fleet modernisation or scrappage programme and higher demand from consumption-driven sectors, especially for LCVs (light commercial vehicles) and ICVs (intermediate commercial vehicles) will also aid the segment. Next week, the Nifty Auto index is seen rising due to strong upward momentum across the segment. Maruti Suzuki's stocks are expected to remain in focus on the back of strong sales for the last fiscal and strong demand for Vitara Brezza.
Source : Cogencis Information Services Ltd.