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The stock markets have soared after the initial hiccup on Budget 2016 day. Keeping that and some points explained below in mind, 5 auto stocks have turned positive for analysts including Tata Motors, Maruti Suzuki, TVS Motor and more. That is the case despite domestic car sales registering a muted growth for the second consecutive month (February) of the current calendar – the top five carmakers in the country have put together a growth of 0.95 per cent following Jat agitation in Haryana. The passenger vehicle industry is expected to come under more pressure as prices of vehicles are set to go up for the second time in a span of two months with the introduction of an infrastructure cess of up to 4 per cent. Tata Motors and Maruti Suzuki have already hiked their car price to offset the impact of infrastructure cess proposed in Budget 2016. (Reuters)
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“For the Swift most inquiries are for the mid-variant while for the Baleno over 50% of the bookings are for the top-end variant. The difference in prices is quite wide and therefore there is limited cannibalisation,” the management had said in response to queries from analysts. SALES IN FEBRUARY, 2016: Maruti Suzuki Baleno: 6,888; Hyundai Elite i20: 8,419, Maruti Ciaz: 5,162, Honda City: 4,880. (Reuters)
The utility major, Mahindra & Mahindra, registered a 27 per cent year-on-year rise in the utility vehicle (UV) segment. The new launches KUV100 and TUV300 drove the sales volumes for the company in the month of February 2016, with KUV100 registering bookings of 27,000 units. The total PV segment for M&M grew at 26 per cent YoY to 23,718 units. As per the management, the auto sales growth has been on the back of the company’s range of passenger and commercial vehicles. Angel Broking said, “We have ‘neutral’ ratings on Maruti Suzuki, ‘Accumulate’ rating on Mahindra & Mahindra.” (Reuters) -
According to Prabhudas Lilladher, continued allocation under MGNREGA and infrastructure focus are positive for the auto sector; biggest beneficiaries are M&M, Hero MotoCorp on rural side and CV companies on infrastructure side. While MSIL and M&M witnessed marginal and strong growths respectively, Tata Motors witnessed a decline of 20 per cent in its passenger vehicles sales for the month of February to 10,962 units. (Reuters)
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In two-wheelers space, Hero MotoCorp reported a 14 per cent increase in sales to 5,50,992 units during the period despite of production being impacted due to local agitations that affected production. Angel Broking has ‘Buy’ rating on Tata Motors and ‘Accumulate’ on Hero MotoCorp. (Reuters)
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Reported EBITDA margin contracted 80bp y-o-y +50bp q-o-q to 6.2%, led by one-time GST compensation of `165 million, 50bp impact and pending discounts of BS3 at `60 million. (Reuters)
US announces new rules for selection of H-1B visa for foreign workers
