The scrips of frontline automobile companies, which had been battered in the recent past following general economic slowdown, were witnessing a sharp spike in the bourses ahead of their earnings call and analysts see the rally being mainly spurred by the street expectations of a better sales and financial performance driven by both domestic and overseas demand. The near bankruptcies of some western auto giants were also expected to aid exports of frontline auto firms, with competitive products in the coming quarters, they say.
?On an annualised basis, the overall auto sales have never gone to the negative territory, though they remained flat at around 0.79%. During the March quarter, the fortune of the sector is expected to be reversed with major companies posting healthy growth in sales during the months of February and March. This has given hope of an overall growth in both the topline and bottomline for the entire fiscal?, said an analyst with a local brokerage house.
?Slash in the factory taxes as part of the stimulus package announced by the Centre and the RBI?s decision to soften interest rates to spur growth had gone a long way in putting the auto sales back on track. Also, the near bankruptcy of western auto giants like GM had kindled the hope of a higher exports in the coming quarters. This is already started reflecting on the sales figures of major auto makers with exports growing in double digits in the past two months?, said an industry insider who did not want to be named.
Tata Motors had surged 11.64% on Wednesday to close the day at Rs 281.5 on The Stock Exchange, Mumbai, while M&M spiked 5.4% to close the day at Rs 473.25. Similarly, Maruti, country?s largest car maker gained 2.89% to close at Rs 846.6, while TVS Motors ruled flat at Rs 25.3 on BSE, while its arch rival Bajaj Auto gained 3.5% to close the day at Rs 633.05. Hero Honda also gained a tad lower than 1% to close the day at Rs 168.60.
According to analysts, the sales of all major auto makers had seen a spike during the month of February and March with a month-on-month increase ranging from 7% to 31%. The only company which seen its sales nose-diving was Bajaj Auto, the sales of which had declined by a tad over 16%.