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Bajaj Auto, Hero Moto shares fall 5.5% on weak sales, higher crude oil; More correction in auto stocks ahead?

Bajaj Auto, Hero MotoCorp, TVS Motors, and other auto stocks fell over 5.5 per cent on Wednesday, after the two wheeler companies posted lower February sales numbers.

Bajaj Auto, TVS Motor, auto stocks
BSE Auto index was also down more than 1.5 per cent to 24,147, dragged by losses in Maruti Suzuki, Bajaj Auto, Tata Motors. Image: Reuters

Bajaj Auto, Hero MotoCorp, TVS Motors, and other auto stocks fell over 5.5 per cent on Wednesday, after the two wheeler companies posted lower February sales numbers. Bajaj Auto stock plunged 5.54 per cent to Rs 3,334.65 apiece, Hero MotoCorp lost 2.7 per cent to trade at Rs 2,443.80, TVS Motor Company shares fell 2.7 per cent to Rs 600.60 apiece. Eicher Motors stock price was down 1.4 per cent to Rs 2,548.90 apiece, and Atul Auto share price fell 2.8 per cent to Rs 2,547.20 apiece. 

Analysts say that decline in February sales coupled with a bearish global sentiment and rising crude oil prices have led to a good sell-off in 2-wheeler stocks recently. “Technically, auto stocks still look weak & another 3-5% correction can be expected in the coming days.” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told FinancialExpress.com. Ramachandran also added that TVS Motor can be accumulated close to 590 levels & Eicher Motors along with Hero MotoCorp can be bought from 2480 & 2450 levels respectively. 

BSE Auto index was also down more than 1.5 per cent to 24,147, dragged by losses in Maruti Suzuki, Bajaj Auto, Tata Motors, Bosch, Ashok Leyland, among others. The BSE Auto index is down 13 per cent from it’s all-time high of 27,271.03, touched in November last year. The two wheeler stocks were in downtrend attributed by the poor sales numbers and overall weakness in the sector. “TVS Motor may see some more weaknesses, taking cues from the weak consumer sentiments. However, the stock will be a value buy at the lower levels of Rs 580-520 for the target of 680 levels in the long term,” Ravi Singh, VP & Head of Research, Share India Securities, told FinancialExpress.com.

In comparison, S&P BSE Sensex tanked 815 points or 1.45 per cent to 55,432, while Nifty 50 crashed 194 points or 1.16 per cent to 16,545.50 levels

Analysts at Motilal Oswal Financial Services said that PVs/CVs/3Ws (excluding Bajaj Auto) were inline while tractor/2W (excluding Bajaj Auto) were below estimates. While the demand for PV sustains, improving trends in wholesales reflect easing of supply chain issues though the situation remains dynamic. It added that 2W demand recovery was still back ended and showed no signs of uptick. “While easing semiconductor supplies boost PV retails, 2W segment is yet to recover amid high cost of ownership. We prefer 4Ws over 2Ws, on the back of strong demand and offer a stable competitive environment,” it added.

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