Stocks of automobile companies are seen to be range-bound in the week ahead. Last saturday, the BSE Auto Index ended at 9492.19 points, up almost 2%. Oil Minister S. Jaipal Reddy ruling out any immediate hike in fuel prices is also likely to lift sentiments. Investors will also take cues from India's industrial production growth data for July scheduled for Wednesday. In June, India's industrial production contracted 1.8%. We are positive on Tata Motors and Maruti Suzuki. Maruti Suzuki has started ramping up production at its Manesar plant, which is a positive. The Society of Indian Automobile Manufacturers will also detail auto sales numbers for August on Monday. Any news of likely a cut in production from the SIAM data may have a bearing on auto stocks' movement. As it is, the two-wheeler industry is facing high inventory build-up. Hero MotoCorp has reportedly lowered production by 15-18% in September to avoid an inventory pile-up. Hero MotoCorp stock is seen under-pressure in the short term. Softening of commodity prices globally is expected to aid margins across the board.
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Auto Stocks Outlook: 10-14.09.2012
Stocks of automobile companies are seen to be range-bound in the week ahead. Last saturday, the BSE Auto Index ended at 9492.19 points, up almost 2%. Oil Minister S. Jaipal Reddy ruling out any immediate hike in fuel prices is also likely to lift sentiments. Investors will also take cues from India's industrial production growth data for July scheduled for Wednesday. In June, India's industrial production contracted 1.8%. We are positive on Tata Motors and Maruti Suzuki. Maruti Suzuki has started ramping up production at its Manesar plant, which is a positive. The Society of Indian Automobile Manufacturers will also detail auto sales numbers for August on Monday. Any news of likely a cut in production from the SIAM data may have a bearing on auto stocks' movement. As it is, the two-wheeler industry is facing high inventory build-up. Hero MotoCorp has reportedly lowered production by 15-18% in September to avoid an inventory pile-up. Hero MotoCorp stock is seen under-pressure in the short term. Softening of commodity prices globally is expected to aid margins across the board.