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Informist, Friday, Oct. 11, 2024

MUMBAI – Shares of most automobile companies are largely expected to remain in a thin range next week, while some are expected to advance led by stock-specific news, according to analysts. This week, the Nifty Auto index closed 2% higher after the Reserve Bank of India changed its monetary policy stance to neutral, a move that could lead to a cut in interest rates in the forthcoming policies. The auto index gained even as the industry reported a decline in retail sales in September due to weak demand during festivals like Ganesh Chaturthi and Onam as inauspicious Pitru Paksha, or Shraddh, period fell in the month. 

Of the 15 constituents of the Nifty Auto index, 11 gained over last week, three declined and one ended flat. Shares of some component makers performed better than original equipment manufacturers during the week. Samvardhana Motherson International and Balkrishna Industries were the top gainers, while Apollo Tyres and MRF were among the biggest losers. Compared to the auto index, both the benchmark Nifty 50 and Sensex declined by 0.2% and 0.4%, respectively.

The movement of auto stocks this week was influenced by RBI policy and September retail sales data, but next week onwards investor focus will shift to earnings and company-specific developments, said an analyst at a domestic brokerage. Bajaj Auto is scheduled to announce its earnings for the Jul-Sept quarter on Wednesday. The company's net profit is expected to grow by 22% on year to INR 22.32 bln rupees and the revenue is expected to expand by 23% on year to 133.03 bln rupees.

"The Nifty Auto index could see a time-wise correction in the near-term. Now, there will be more of a sideways movement with stock-specific action happening in the index," said Ruchit Jain, a lead analyst at 5paisa. "Last week, we did see some relative outperformance auto space after the RBI announcement. But the auto stocks are not showing the momentum that was seen a couple of months ago. So, investors should trade with a very stock-specific approach," he said. 

On the auto index front, according to Jain, the crucial support is seen around 25300. Till the time this support is intact, the mid- to long-term trend remains positive. Next week, support for the auto index is seen at 26200 points and resistance at 26700 points.   

TOP HEADLINES

* Uno Minda's JV Toyota Gosei Uno Minda starts ops at Rajasthan unit
* Olectra Greentech issues undertaking for INR 3 bln line of credit by REC
* Bharat Forge completes transfer of 39.43% stake in TMJ Electric to its arm
* Endurance Tech to invest INR 3 bln for greenfield project in Aurangabad
* CARE assigns 'A1+' rating to M&M's INR 17.6-bln short-term bank facilities
* PRESS: Govt looking into consumer complaints against OLA Electric
* Hyundai to launch electric Creta in Jan-Mar; bring 3 more EVs in medium-term
* Hyundai Motor expects PV retail sales to pick up during festivals in Oct
* TVS Motor, Ecofy Finance partner to boost electric three-wheeler financing
* M&M incorporates step-down subsidiary in Thailand to sell farm equipment
* IPO Alert: Hyundai Motor sets price band at INR 1,865-INR 1,960 per share
* M&M's total automobile output at 78,364 units in Sept, down 1.7% on year
* Olectra Greentech denies report claiming it won Himachal electric bus order
* PRESS: Hyundai Motor's $3-bln IPO next week likely at INR 1,865-1,960/share
* Tata Motors group Jul-Sept wholesale volumes drop 11% YoY
* SPOTLIGHT: Apr-Sept PV sales keep losing momentum, down first time since FY21
* JLR's Jul-Sept wholesale volume down 10% on year, retail sales fall 3%
* Craftsman Automation subscribes to conv debs of Sunbeam Lightweighting
* Ashok Leyland starts delivery of electric trucks to BillionE Group
* INTERVIEW: Atul Auto expects 3-wheeler sales to hit pre-COVID levels by FY26
* Sept auto retail sales down on weak demand during festivals, says FADA

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Darshan Nakhwa 

Edited by Deepshikha Bhardwaj

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