Prefer Hero over Bajaj Auto; Maruti ahead of Tata Motors & Ashok Leyland: Siddhartha Khemka

economictimes.indiatimes.com:

Siddhartha Khemka, Head-Retail Research, MOFSL, says “in the long term, we would continue to prefer a tier-1 IT players given that a), valuations are comfortable, b), long term growth visibility is there. But at the same time, the near term underperformance could continue and which is where one can prefer looking at the tier-2 players.”

Khemka also says: “Our preference in the auto space would be Maruti, followed by Tata Motors and Ashok Leyland. Within the two-wheeler space, we have a neutral rating on Bajaj Auto, while we have a buy rating on Hero Moto because of the cheaper valuations and the improving growth in the rural sector. We prefer Hero Moto over Bajaj Auto.”

What is the global screen telling you about the resilience that the Indian markets are showcasing?
The Indian economy is relatively better placed compared to global peers and there are headwinds starting with the high US interest rates, bond yields, inflationary concerns, growth concerns and to top it all, the geopolitical concerns, which provides volatility, which the market does not want at this point and where earnings are kind of picking up.

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Both in the US as well as in India, the earnings are pretty much the only thing that is kind of supporting the markets. India, there are other positive factors in the sense that inflation is under control, economic growth is pretty strong. The IMF has recently upgraded India's GDP growth forecast. That is definitely a positive, at least for the FIIs, domestic