Maruti Suzuki among 5 auto stock picks from Motilal Oswal
Motilal Oswal picked Maruti Suzuki and Ashok Leyland as their top picks from among the auto OEMs while Craftsman Automation, Happy Forgings and Samvardhana Motherson International from the auto ancillary segment, stating that one will have to make selective micro strategies to outperform in the sector.
“It is now an established fact that the majority of easy gains in Auto OEM stocks are now behind us, as we have witnessed significant volume growth across segments over the last two years, and input costs also appear to have bottomed out,” said a report by Motilal Oswal.
“2W retail growth is expected to remain flat YoY for the month. Similarly, PV segment volume is expected to decline 10-12% YoY as weakness is now evident even in UVs, along with a rise in discounts in key models,” said Aniket Mhatre, Analyst at Motilal Oswal.
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Medium and heavy commercial vehicles (MHCVs) and light commercial vehicles (LCVs) are also expected to see a single-digit decline due to underlying weakness in categories like tipper and cargo whereas the tractor segment is expected to witness a decline of 20-25% YoY in retails, Mhatre added.
For the month of June, the domestic brokerage firm estimates dispatches for 2-wheelers, Passenger Vehicles and 3-wheelers to grow 4%,5% and 1% YoY, respectively, while commercial vehicles and tractors are estimated to decline by 1.5% and 4.5% YoY, respectively.
Retails across categories are expected to remain weak
