Auto Stocks Outlook
Seen rangebound next week; earnings, Oct sales in focus
This story was originally published at 21:48 IST on 25 October 2024
Register to read our real-time news.Informist, Friday, Oct 25, 2024
MUMBAI - Shares of most auto companies are expected to trade in a narrow range next week, and will take cues from Jul-Sept earnings announcements and October wholesale volume data, according to analysts. Next week, Maruti Suzuki India and JBM Auto will be in focus as they are scheduled to announce earnings for Jul-Sept. These and other manufacturers will also release their October wholesale numbers on Friday and Saturday.
In the week gone by, the auto stocks saw some selling pressure due to the likelihood of weaker sales during the ongoing festival season. The Nifty Auto index closed 5.4% lower at 23799.30 points. Of the 15 constituents in the auto index, 14 declined over last week. Bajaj Auto was the only company to have gained. In comparison, TVS Motor Co and Exide Industries were among the top losers. Compared to the auto index, the benchmark Nifty 50 and Sensex declined by 2.7% and 2.2%, respectively.
"Nifty Auto remained under pressure this week. While signs of a recovery are absent, the index is nearing a key support level at the 200 simple moving average around 23,300. Although pinpointing an exact bottom may be challenging, long-term investors could consider accumulating quality stocks gradually," said Rajesh Bhosale, technical analyst at Angel One.
Auto stocks have seen a significant run-up in the past few months, and were near the overbought zone before the recent sell-off, said an analyst from a domestic brokerage. There will be some consolidation in shares of auto companies in the near term, but the long-term trend remains positive for the space.
This week, TVS Motor reported lower-than-expected earnings for the September quarter despite better sales volume and operating leverage. The company clocked a net profit of INR 6.63 billion for Jul-Sept, up 23.5% on the year, and a top line of INR 92.28 billion, up 13.3% on year. Next Week, India's largest passenger vehicle manufacturer, Maruti Suzuki, is expected to report muted growth in key earnings parameters due to a slight decline in wholesale volumes and higher discounts offered during the quarter.
TOP HEADLINES
* Earnings Outlook: Low volumes to puncture Ashok Leyland's Jul-Sept earnings
* CIE Automotive Jul-Sept consol net profit falls 48% YoY , sales down 6.4%
* Ashok Leyland arm gets order to lease 500 e-buses to Chennai transport corp
* Nirmal Bang, Prabhudas Lilladher cut TVS Motor target price, retain ratings
* Analyst Concall: TVS Motor sees Oct-Dec 2-wheeler industry sales up 7-8%
* M&M opens two state-of-the-art development test facilities in Tamil Nadu
* Earnings Review: Sona BLW Jul-Sept consol PAT, revenue beat Street estimate
* Earnings Review: TVS Motor Jul-Sept PAT, sales below Street's estimates
* Escorts Kubota to sell railway pdts unit for INR 16 bln cash to Sona BLW
* Earnings Outlook: Low volumes, discounts may put Maruti Suzuki in slow lane
* Craftsman Automation Jul-Sept consol PAT falls 34.7% YoY to INR 616.9 mln
* Tata Motors starts delivery of LNG trucks to Clean Green Fuel
* Olectra Greentech Jul-Sept consol PAT up over 2-fold YoY at INR 475.62 mln
* IPO Alert: Hyundai Motor to list Tue; issue price INR 1,960 per share
* Earnings Outlook: High premium pdt sales, selling price to aid Eicher Motors
* Earnings Outlook: Premium product sales, price hikes to aid Hero MotoCorp
* Eicher Motors' Royal Enfield starts ops at mfg unit in Bangladesh
* TVS Motor launches TVS Apache RTR 310 in Singapore, to introduce more pdts
* Sona BLW commences production at Manesar plant
* Tata Motors to supply 1,000 bus chassis to Uttar Pradesh transport body
* JBM Auto on Oct 28 to consider stock split, Jul-Sept earnings
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 | 214.00 | (-)4.20 | 223.10 | 206.30 |
| Bajaj Auto | 10206.10 | 1.40 | 10609.60 | 9723.20 |
| Eicher Motors | 4591.60 | (-)3.70 | 4754.90 | 4427.10 |
| Hero MotoCorp | 4973.30 | (-)4.70 | 5267.40 | 4728.00 |
| Mahindra & Mahindra | 2720.85 | (-)8.20 | 2887.50 | 2596.00 |
| Maruti Suzuki India | 11502.85 | (-)5.00 | 11933.40 | 11224.80 |
| Tata Motors | 864.30 | (-)5.00 | 897.60 | 840.70 |
| TVS Motor Co | 2449.80 | (-)9.80 | 2569.40 | 2315.20 |
| Nifty Auto | 23799.30 | (-)5.40 | 24757.40 | 23040.70 |
| Nifty 50 | 24180.80 | (-)2.70 | 24598.00 | 23865.30 |
| S&P BSE Sensex | 79402.29 | (-)2.20 | 80713.00 | 78482.60 |
End
Reported by Darshan Nakhwa
Edited by Akul Nishant Akhoury
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