Sectoral Spotlight: Auto sector set to ride on festive fuel. What stocks should you piggyback on?
auto stocks, whose fortunes will be aligned with the performance of the companies during this period, have come under the spotlight.
Top brokerages along with analysts that ETMarkets spoke to remain gung ho on the prospects of the sector.
A look at the Nifty Auto index’s performance over the past one year suggests that it has done better than Nifty50 and also outperformed Nifty IT, Nifty Bank, Nifty FMCG, Nifty Metal and Nifty Media during this period while underperforming Nifty Pharma and Nifty Realty.
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Kranthi Bathini, Director-Equity Strategy at WealthMills Securities opines that the outperformance of the auto sector will likely continue going ahead in the wake of the upcoming festive season. The strength in the economy, disposable income and the growing preference for big cars will see the auto industry sail comfortably through the season, Bathini said.
The auto sales have been strong on a year-on-year and quarter-on-quarter basis with traction for sports utility vehicles (SUVs) growing among vehicle buyers, he said, while highlighting that the future is EVs (electric vehicles) and India is witnessing a transformational shift towards them.
The WealthMills Securities Director remains bullish on Tata Motors, Mahindra & Mahindra and Maruti Suzuki among the OEMs while he is betting on Minda Corporation and Samvardhana Motherson International among the ancillaries.
The views are for the long term with potential upside seen between 15% and 20%.
Sharekhan expects automobile players to continue their focus on premiumisation, new product launches and EBITDA margin expansion in FY24. In its
