Play auto via auto finance or even auto ancillaries: Anand Tandon
Anand Tandon, Independent Analyst, says that “the key challenge in IT today is that we are rotating into IT for a lack of other good places. But at the same time, there is no case that has been made that the IT sector is actually going to either perform very well in the near term or that the outlook has improved in terms of the demand side of the equation. ”
Which are the top stocks that you like in the auto space?
The view on auto is not particularly positive for me.
There is a lot of change that is happening technologically as well as from the number of companies that are coming in. Given that EV is the new kid in town and therefore there are many new companies which are also playing the game. That will mean that the established players are not necessarily the only likely winners.
If you look at two-wheelers, for example there are two things that you can see; one is the EV, the other is the premiumisation of the product base as it is.
We have a lot of new products coming in. The valuations for most of these companies are also not very cheap. They have had a good run on the way up and therefore, whatever undervaluation there may have been, has been mostly sorted out.
In the four-wheelers, again the segments that are doing well are for example the SUVs and there we have a whole new set of launches from two competing players.
So net-net, you have to actually wait for the dust to settle to see who the winners are. If you are really looking to play the auto segment, maybe a better way of doing it would be to play either the auto finance or even the auto ancillaries because there at least the fluctuations are a lot less.
Importantly, it is also a segment which takes care of the aftermarket. So you have not only the primary
