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Informist, Friday, Jul 26, 2024

MUMBAI – Shares of automobile companies are likely to retain their positive momentum next week, as analysts expect the government's focus on infrastructure and the rural economy in Budget 2024-25 (Apr-Mar) to boost auto sales in the medium-term. The Nifty Auto index touched an all-time high of 26289.35 today, and closed 5.20% higher at 26250.70 on a week-on-week basis. In comparison, the Nifty 50 gained 1.20% and hit a new record high of 24861.15. On the other hand, Sensex closed 0.90% higher at 81332.72.

All 16 constituents of Nifty Auto gained on a week-on-week basis. Tata Motors and Ashok Leyland were among the top gainers, closing 13% and 10% higher, respectively. Ashok Leyland gained even after the company reported an 8.8% on-year decline in net profit. The commercial vehicle maker's share price was driven by a bullish view and a 'buy' rating from international brokerage Nomura. Meanwhile, Tata Motors' market capitalisation crossed the 4-trln-rupee mark for the first time following an upgrade from the international brokerage. 

The Nifty Auto index has gone through a consolidation phase in the last one month. This was mostly a time-wise corrective phase, said Ruchit Jain, lead research analyst at 5paisa. "The index recorded the last all-time high on June 18, and that level has been taken out today. This momentum is expected to continue in the near term," Jain said.

"For the last couple of months, the Nifty Auto index was trading within a range. However, this week it broke past the hurdle of 25,900, which had twice acted as resistance. This indicates a continuous channel breakout in the index. We expect it to rally towards 28000 in the near term, and any dip should be considered a buying opportunity with 25900-25800 as immediate support," said Rajesh Bhosale, a technical analyst at Angel One.

"While there was broad-based buying in the auto space, certain counters look particularly promising and are poised for strong moves. We especially like Tata Motors, Eicher Motors, Ashok Leyland, and TVS Motor Co," said Bhosale. "Some of the ancillary names, such as tyre stocks, are also looking positive where the price-volume action is bullish," said Jain.

Next week, Maruti Suzuki India, Mahindra and Mahindra, and Tata Motors will be in focus as all three are scheduled to announce their Apr-Jun earnings.  

TOP HEADLINES
* Hero MotoCorp says tax tribunal quashed 23.37-bln-rupee demand
* Earnings Review: Ashok Leyland PAT falls 8.8% on yr on high tax outgo
* SC seeks Centre response on policy decisions to promote e-vehicles
* Jupiter Wagons Apr-Jun consol PAT up 46.2% YoY to 919.21 mln rupees
* Ashok Leyland Apr-Jun PAT falls 8.8% YoY to 5.26 bln rupees
* Sona BLW board OKs raising up to 24 bln rupees via securities
* Craftsman Automation Apr-Jun consol PAT dn 28.6% YoY to 532 mln rupee
* Sona BLW Precision Apr-Jun consol PAT up 27% YoY to 1.4 bln rupees
* HC quashes proceeding vs Hero MotoCorp Munjal in FX currency case
* Earnings Outlook: Bharat Forge Apr-Jun net profit seen up 28% on yr
* ZF Commercial Apr-Jun PAT falls 0.5% YoY, sales fall 2.3%
* Earnings Outlook: Ashok Leyland PAT seen up by modest 1.5% YoY Apr-Jun
* Earnings Outlook: Maruti Suzuki PAT up on price hikes, low input cost
* M&M to unveil five-door Thar Roxx on Independence Day
* Earnings Outlook: Hero MotoCorp PAT seen up 44% on year in Apr-Jun
* Maruti Suzuki says production briefly halted due to IT outage
* Earnings Outlook: Robust order book, low input cost to aid Samvardhana

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Darshan Nakhwa 
Edited by Tanima Banerjee

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