Auto Stocks Outlook for the week – 15 to 19.05.2017
Auto Stocks Outlook for the week – 15 to 19.05.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading with a positive bias next week, with Maruti Suzuki India Ltd and Eicher Motors Ltd likely to be in focus. Strong positive trend is expected in most of the automobile stocks in the next week, primarily led by Maruti Suzuki and Eicher Motors, on account of India Meteorological Department's prediction of monsoon rains being higher than predicted earlier. On Wednesday, K.J. Ramesh, the weather bureau's director general, said that the southwest monsoon rains this year were likely to be higher than projected, and could even reach 100% of the long period average. This boosted sentiment and resulted in broad-based buying. Good monsoon rains are likely to drive rural demand due to a rise in disposable income. This is likely to benefit most automobile companies, especially Maruti Suzuki, Eicher Motors, and Hero MotoCorp, which see substantial demand from rural areas. For Maruti Suzuki, prospects remain strong on the back of continued demand for its Baleno hatchback, the Vitara Brezza compact sport utility vehicle, and the Ciaz sedan. The company is set to launch its latest product--the all new Dzire--on Tuesday. The company's aggressive network expansion strategy has boosted its prospects. The carmaker has planned capital expenditure of 45 bln rupees for 2017-18 (Apr-Mar), and a large chunk of which would go towards buying new properties to open sales and service outlets. Eicher Motors Ltd, the market leader in the premium motorcycles segment, is expected to commission its third manufacturing unit in Chennai by August. This will help the Gurugram-based company increase its output to around 825,000 units of Royal Enfield motorcycles in the current financial year. The company's joint venture with Volvo Group, VE Commercial Vehicles, plans to invest nearly 4.5 bln rupees across business verticals in the current financial year started April. The leader in the entry-level motorcycle segment, Hero MotoCorp Ltd, is expected to emerge as one of the biggest beneficiaries of a good monsoon. The company, which sees a large share of the demand from rural markets, plans to launch six new models in 2017-18. The New Delhi-based automaker also plans to invest 25 bln rupees in business development and capacity expansion over a period of two years. The two-wheeler manufacturer also plans to expand its scooter segment to consolidate its position in the two-wheeler market across rural and urban markets. Next week, Stocks of Hero MotoCorp are expected to rise on the back of optimistic commentary from company's management and expectations of a good monsoon. Eicher Motors is also seen aiding positive sentiment on the automobile index. The Nifty Auto index is likely to gain from the positive trend across automobile companies and may rise towards 12000 points.
Source : Cogencis Information Services Ltd.
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Auto Stocks Outlook for the week – 15 to 19.05.2017
( www.rupeedesk.in )
Stocks of most automobile companies are seen trading with a positive bias next week, with Maruti Suzuki India Ltd and Eicher Motors Ltd likely to be in focus. Strong positive trend is expected in most of the automobile stocks in the next week, primarily led by Maruti Suzuki and Eicher Motors, on account of India Meteorological Department's prediction of monsoon rains being higher than predicted earlier. On Wednesday, K.J. Ramesh, the weather bureau's director general, said that the southwest monsoon rains this year were likely to be higher than projected, and could even reach 100% of the long period average. This boosted sentiment and resulted in broad-based buying. Good monsoon rains are likely to drive rural demand due to a rise in disposable income. This is likely to benefit most automobile companies, especially Maruti Suzuki, Eicher Motors, and Hero MotoCorp, which see substantial demand from rural areas. For Maruti Suzuki, prospects remain strong on the back of continued demand for its Baleno hatchback, the Vitara Brezza compact sport utility vehicle, and the Ciaz sedan. The company is set to launch its latest product--the all new Dzire--on Tuesday. The company's aggressive network expansion strategy has boosted its prospects. The carmaker has planned capital expenditure of 45 bln rupees for 2017-18 (Apr-Mar), and a large chunk of which would go towards buying new properties to open sales and service outlets. Eicher Motors Ltd, the market leader in the premium motorcycles segment, is expected to commission its third manufacturing unit in Chennai by August. This will help the Gurugram-based company increase its output to around 825,000 units of Royal Enfield motorcycles in the current financial year. The company's joint venture with Volvo Group, VE Commercial Vehicles, plans to invest nearly 4.5 bln rupees across business verticals in the current financial year started April. The leader in the entry-level motorcycle segment, Hero MotoCorp Ltd, is expected to emerge as one of the biggest beneficiaries of a good monsoon. The company, which sees a large share of the demand from rural markets, plans to launch six new models in 2017-18. The New Delhi-based automaker also plans to invest 25 bln rupees in business development and capacity expansion over a period of two years. The two-wheeler manufacturer also plans to expand its scooter segment to consolidate its position in the two-wheeler market across rural and urban markets. Next week, Stocks of Hero MotoCorp are expected to rise on the back of optimistic commentary from company's management and expectations of a good monsoon. Eicher Motors is also seen aiding positive sentiment on the automobile index. The Nifty Auto index is likely to gain from the positive trend across automobile companies and may rise towards 12000 points.
Source : Cogencis Information Services Ltd.