SIAM report on strong Q2 growth buoys 2-wheeler stocks

Our Markets Bureau

Mumbai, Oct 3: The Society of Indian Automobile Manufacturers (SIAM) report on a strong second quarter for the automobile sector, particularly two-wheelers, had a positive impact on the share price of two-wheeler majors like Hero Honda, Bajaj Auto (BAL), Mahindra & Mahindra (M&M) and Telco. "And with the optimism built over strong growth in the future, the sector seems more attractive than ever," observe market sources.

The Hero Honda counter logged heavy activity with firming up of prices. On the BSE, the stock gained Rs 4.25 before ending the day at Rs 192. Around 26,000 shares changed hands during the day. BAL, too, reported a marginal gain in its share price of Rs 1.95 before settling the day at Rs 248.40.

Amongst the two-wheelers manufacturers, Hero Honda reported a smart growth. BAL also raked in the moolah with its new product being well received. Hero Honda reported a 30 per cent growth in its motorcycle segment, while BAL witnessed a 20 per cent growth. This raises optimism about the encouraging trend in the near future for the motorcycle segment. However, the Chennai-based TVS Scooters has disappointed most with a rather tame growth. The company has recently parted ways with its joint venture partner, Suzuki of Japan.

According to analysts: "Amongst the automobile sector, the motorcycle segment looks more attractive and the sector is expected to post a growth in excess of 20 per cent." However, the future is quite uncertain as far as scooters and mopeds are concerned. "In fact, scooters and mopeds are expected to report slower growth or negative growth, particularly the mopeds," they added.