Auto Stocks Outlook for the week (24-28.10.2011)
A rate hike would always be negative for auto stocks. Whether it (RBI) hints at a pause is what the markets are keen to learn. Passenger car sales in the country are already dwindling because of costly loans and high fuel prices. From April to September, domestic car sales have dropped over 1% from the same period last year.
In comparison, car sales had grown almost 34% on year during the first six months of the last fiscal year. Society of Indian Automobile Manufacturers has even downgraded its passenger car sales growth forecast for the current financial year to 2-4%, the slowest since 2008-09 when sales had risen by a mere 1.4%.
This is the second time in 2011-12 that Society of Indian Automobile Manufacturers has revisited its sales growth forecast. It had originally estimated domestic car sales to grow at 16-18% in the current financial year, but later revised the figure to 10-12%. Maruti Suzuki would be detailing Jul-Sep earnings Oct 29. We expects Maruti Suzuki's profit in the second quarter to decline by a sharp 34% year-on-year due to slower sales and yen hedges at sequentially lower levels.
Automobile stocks are seen taking cues from the monetary policy review next week. The Reserve Bank of India
A rate hike would always be negative for auto stocks. Whether it (RBI) hints at a pause is what the markets are keen to learn. Passenger car sales in the country are already dwindling because of costly loans and high fuel prices. From April to September, domestic car sales have dropped over 1% from the same period last year.
In comparison, car sales had grown almost 34% on year during the first six months of the last fiscal year. Society of Indian Automobile Manufacturers has even downgraded its passenger car sales growth forecast for the current financial year to 2-4%, the slowest since 2008-09 when sales had risen by a mere 1.4%.
This is the second time in 2011-12 that Society of Indian Automobile Manufacturers has revisited its sales growth forecast. It had originally estimated domestic car sales to grow at 16-18% in the current financial year, but later revised the figure to 10-12%. Maruti Suzuki would be detailing Jul-Sep earnings Oct 29. We expects Maruti Suzuki's profit in the second quarter to decline by a sharp 34% year-on-year due to slower sales and yen hedges at sequentially lower levels.
