Automobile industry to find growth a bit more challenging this year: Mahantesh Sabarad

economictimes.indiatimes.com:

Mahantesh Sabarad, independent market expert, says “although auto stocks have done well compared to what they were doing last year, there is a definite growth both in terms of top line and bottom line but that is not enough when it comes to the expectations and that is why some of these stocks are running out of steam.”Of the latest earnings and auto sales that we have seen, what has stood out to you in terms of the big earnings over the last couple of days or the auto sales data?Basically, in terms of auto sale numbers, what you can definitely notice is that the sales are growing quite sharply. This is partly because of the Covid effect wearing off and a lot of pent-up demand coming in.

Having said that, in terms of results, the expectations were very high. I find that many of these companies have not necessarily met the expectations as far as results are concerned.

Although they have done well compared to what they were doing last year, there is a definite growth both in terms of top line and bottom line but that is not enough when it comes to the expectations and that is why somewhere some of these stocks are running out of steam. I reckon that for the year ahead, probably the automobile industry will find the growth a bit more challenging.

It will be muted both in terms of volumes as well as in terms of profitability growth, so one has to take a further deeper call in terms of what other prospects lie ahead for automobile companies both in terms of let us say new plant announcements or new model announcements and things like that.The EMS companies have seen a very strong growth curve whether it is Syrma or Kaynes, Dixon or Amber. How much of the gains are realistic?So, one thing you should remember, there is the new