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Informist, Friday, Nov. 29, 2024

MUMBAI – Shares of most auto manufacturers are expected to trade with a negative bias next week as sales in November are expected to either decline or remain flat year-on-year, thanks to the high base and muted demand post the festival season, said analysts. Automobile companies will release their wholesale numbers for November on Sunday and Monday.      

Two-wheeler sales are expected to be muted in November due to inventory de-stocking with dealers and subdued demand post the festival season, according to analysts. The softness in retail demand is also likely to impact passenger vehicle wholesales for the month. Further, tractor sales are also likely to be subdued due to a high base and inventory de-stocking with dealers. In 2023, a notable part of the festival period was in November, which resulted in higher sales. However, in 2024, the festival season concluded in the first week of November. 

Among the auto segments, commercial vehicle makers are expected to report strong on-year growth in sales in November, due to a pickup in infrastructure development activity and freight availability, Nuvama Institutional Equities said in a report.

"Nifty Auto continues to consolidate within a range and remains one of the underperforming sectors. From a trading perspective, it's best to wait for signs of strength. However, for long-term investors, such dips present opportunities to buy quality stocks gradually," said Rajesh Bhosale, technical analyst at Angel One. 

This week, the Nifty Auto index closed 0.8% lower at 23368.55 points. Of the 15 constituents in the auto index, nine gained over last week and the rest declined. Battery maker Exide Industries Ltd and commercial vehicle manufacturer Ashok Leyland Ltd were among the top gainers. In comparison, Bajaj Auto Ltd and Eicher Motors Ltd were among the biggest losers. Compared to the auto index, both the benchmark Nifty 50 and Sensex gained by 0.9%, respectively. Next week, the auto index's resistance level is seen at 23632.30 and support is expected to be around 22990.

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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 Deepshikha Bhardwaj

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