Nifty Auto vs Nifty Metal: Which sector should investors prefer for long term? Experts answer
Exide Industries has gained the most, 59.5 percent, followed by M&M, Samvardhana Motherson, and Bosch, up over 40 percent each. Meanwhile, Bajaj Auto, Hero Moto, Ashok Leyland, Tata Motors DVR, Tata Motors, and Balkrishna Industries also jumped between 20 percent and 34 percent each.
Furthermore, Eicher Motors, TVS Motor Company and Apollo Tyres gained 14.5 percent, 11.3 percent and 3.8 percent, respectively in this period. However, MRF lost a little over 1 percent in this year so far.In the Nifty Metal index as well, all constituents, except one (Ratnamani Metals Tubes) were positive in 2024 YTD.Hind Zinc was the top performer and gave multibagger returns this year so far, rallying 124 percent, followed by Vedanta, which surged 76 percent.
Meanwhile, NALCO, JSPL, Hind Copper, SAIL, Tata Steel, Jindal Stainless and NMDC also advanced between 24 percent and 48 percent each. Other stocks Hindalco, Adani Enterprises, Welspun Corp, APL Apollo Tubes, and JSW Steel also added between 2 percent and 15 percent each.
However, Ratnamani has shed 3.5 percent in 2024 so far.The metals sector is cyclical, dependent on demand-supply conditions across the globe, and hence at best can be a tactical play for a few months or quarters. High leverage levels of most companies lead to distress in downturns.
The automobile sector in a country like India is still in a growth phase. Though the automobile sector also at times gets impacted by cyclicality, the innovation, interest rate trajectory, and income levels of rural and urban populace determine the speed and duration of growth and we can see the value add generated by the auto companies which results in good times in all-time high levels in automobile stocks and the index.Metals are more
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