Auto Stocks Outlook
2-wheeler cos seen up on hope of rise in volume
This story was originally published at 21:12 IST on 23 August 2024
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MUMBAI - Shares of two-wheeler companies are expected to rise next week on expectation of a strong volume growth in the coming quarters. However, gains may be capped next week after several two-wheeler stocks witnessed a significant rise this week.
Shares of two-wheeler players such as TVS Motor Co, Bajaj Auto, and Hero MotoCorp rose 5-7% this week. The brokerage JP Morgan, in a report today, said growth in the Indian two-wheeler industry so far this financial year has outpaced other segments and they expect this demand momentum to continue. The brokerage is bullish on two-wheeler companies on the back of healthy inventory levels and lower risk from rising electric vehicles. It said electric vehicles are rising at a slower pace, and they do not expect any pressure on margins of traditional players for now.
Owing to this, the brokerage raised its target price for Bajaj Auto by 8% to 11,225 rupees. It also upgraded TVS Motor Co's rating to overweight and raised its target price by 32% to 3,050 rupees.
There are some positive triggers for the overall automobile sector ahead that could push stocks higher. Above-average monsoon is expected to help improve income levels in the rural areas, leading to better demand for automobiles. Along with this, the upcoming festival season could also lift demand, analysts said.
Car sales are slightly muted right now, which is likely to remain so in the near term. Car markers with strong order book, such as Mahindra & Mahindra, are expected to report growth even if new bookings may not improve soon.
TOP HEADLINES
* Bharat Forge invests 1.05 bln rupees more in Kalyani Powertrain
* TVS Motor launches new TVS Jupiter 110 starting at 73,700 rupees
* NCLT approves merger of two JVs with Escort Kubota
* ICICI Prudential MF's stake in TVS Motor falls 2% to 7.23%
* Tata Motors to set up 250 charging stations for commercial e-vehicles
* S&P ups Tata Motors credit rtg to BBB/stable from BB+/watch positive
* PRESS: Maruti Suzuki to adjust output to ease dealers' stock - Suzuki
* Bajaj Auto provisions 2.1 bln rupees in Jul-Sep for deferred tax dues
* Data Alert:Jul domestic air passenger traffic 12.99 mln, up 7.3% YoY
* GMR Airports' July passenger traffic at 10.62 mln, up 8% on year
* Sona BLW gets output-linked scheme certificate for another product
* Govt OKs metro project for Thane, extension of Bengaluru, Pune lines
* Escorts Kubota to buy land to set up mfg facility in Uttar Pradesh
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:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Ashok Leyland | 260.40 | 1.70 | 264.60 | 256.80 |
| Bajaj Auto | 10406.45 | 5.20 | 10774.60 | 9745.90 |
| Eicher Motors | 4898.10 | 1.70 | 5001.60 | 4830.50 |
| Hero MotoCorp | 5384.90 | 5.00 | 5510.00 | 5252.40 |
| Mahindra & Mahindra | 2759.00 | (-)2.90 | 2794.80 | 2707.40 |
| Maruti Suzuki India | 12302.30 | 0.70 | 12431.20 | 12189.90 |
| Tata Motors | 1085.15 | (-)1.20 | 1104.50 | 1061.30 |
| TVS Motor Co | 2767.00 | 6.40 | 2845.50 | 2711.90 |
| Nifty Auto | 25850.70 | 1.00 | 26108.10 | 25492.50 |
| Nifty 50 | 24823.15 | 1.20 | 24904.50 | 24731.00 |
| S&P BSE Sensex | 81086.21 | 0.80 | 81415.20 | 80718.80 |
End
Reported by Anshul Choudhary
Edited by Akul Nishant Akhoury
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