After India’s automakers posted double-digit growth numbers in the month of November, investors maybe on the lookout for top stock picks from the sector. Notably, the growth figures are also reflective of a lower base due to demonetisation in the same period last fiscal. All the major auto-manufacturers including Maruti Suzuki, Hyundai Motors India, Toyota Kirloskar, Ford India and Mahindra & Mahindra registered strong numbers in the month. India’s biggest auto company Maruti Suzuki sold a total of 1,44,297 units in November, amounting to a 14.1 per cent year-on-year increase as compared to the corresponding month last year. First runner-up in terms of sales, Hyundai, sold 44,008 units in November, compared to 40,016 units in the same period last year, marking a 10 percent year-on-year growth. Mahindra & Mahindra sold 16,030 vehicles in November 2017, as against 13,198 vehicles during November 2016, recording a growth of 21%. We take a look at top stock from the sector, which may push investor return upward.
After the country’s largest car-maker Maruti Suzuki India reported a 14.3% rise in total domestic passenger vehicle to 1,44,297 CLSA has raised the target price on the shares to Rs 10,000, implying an upside of more than 15.5% from the current market prices. CLSA says that the company is in a sweet spot as easing of competition in small cars and entry level sedans is a positive. Further, the global firm observed that the company is likely to broaden its SUV portfolio in the coming years. CLSA says that the valuation looks justified given higher results visibility, and better longer-term outlook. Maruti Suzuki shares were trading flat at Rs 8,518. CLSA’s target price implies an upside of more than 17% from the current market prices.
Aided by strong show in the 3 wheelers, Bajaj Auto has reported a near 21% growth in the November volumes. “The company anticipates demand of nearly 60,000 3-wheeler units for next few months, hence we believe that 3W numbers should be good going ahead. On the exports front, company has done with 24.5% yoy growth in 2W exports and 41.1% growth in 3W exports. Expansion in the new countries has clearly helped the company to report good set of numbers on the exports front. We have an accumulate rating on the stock with price target of Rs 3,395,” noted Angel Broking in its report. Bajaj Auto shares were trading at Rs 3,162, down by more than 1.15% since the previous close.
After, Ashok Leyland’s November sales surpassed analyst estimates by registering a staggering 51 percent growth backed by MHCV as well as LCV segments, it remains one of top bets in the space. “Ashok Leyland’s November volumes have surprised positively. With total volumes growing by 51% yoy, November has signed that volume growth will remain solid going ahead. MHCV volumes were up 54% yoy while LCV volumes were up 44%. The recovery in the industries and public capex is expected to boost the CV volumes further and we believe, Ashok Leyland, due to its pure play CV business is expected to gain market share. We have a buy rating on the stock with price target Rs 139,” said Angel Broking. Ashok Leyland shares were trading at Rs 114, down by more than 2% since yesterday’s close.