Gurmeet Chadha on 4 auto stocks to buy on dips
Gurmeet Chadha, Co-Founder & CEO, Complete Circle Consultants, says it is a little too early to comment on the festive season because we are not even midway of it, but if the trend continues, then there could be a little bit of derating in auto stocks because none of them trade below 25-30 times.
Chadha also says that amongst two-wheelers, we have TVS Holdings also which is the holding company which they bought and Sundaram Clayton is in the portfolio. So, among the stocks that they would buy on a correction like this, TVS would be the first, followed by Bajaj Auto. He is more interested in auto ancillaries, including names like Sandhar Technologies and Uno Minda.
Does Bajaj Auto warrant a 10% cut with the kind of earnings it has reported?
Gurmeet Chadha: Operationally, Bajaj Auto has reported a slight miss led by lower ASPs and slight miss in margins largely led by commodities, mostly copper. Steel prices were okay. I think the commentary that the initial trends of festive seasons have been a little slower – 1-2% against what the market was expecting and they are guiding more like 5% versus marketing expecting 8-10%.
When you are trading at almost 32-33 times FY26 earnings, on any such miss and any such commentary and if the stock has run up and since they announced buyback, there has been a stellar rally. That is the reason there is a bit of a disappointment coming in. But the good thing is that in exports, they are guiding a good number, especially the Latam market is doing well. Even Nigeria numbers are
