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Informist, Friday, Jan. 17, 2025

MUMBAI – Shares of automobile companies are seen in range next week, analysts said. There are no immediate triggers, but if there are any surprises from the Bharat Mobility Global Expo, stock-specific movements could be seen, analysts said. Key players such as Maruti Suzuki, Hero MotoCorp, Ashok Leyland, and Tata Motors launched new vehicles on Friday at the expo.

This week, the Nifty Auto closed 0.3% lower at 22791.10 points. In comparison, the benchmark Nifty 50 and Sensex fell nearly 1% each. Of the 15 stocks in the Nifty Auto, seven fell over the last week while eight gained. Mahindra & Mahindra and Balkrishna Industries were the worst performers of the week. Samwardhana India and TVS Motor Co. gained the most. 

"In December, we could see trend reversals in two specific categories, that is, small cars and sports utility vehicles," Ravi Gupta, a research analyst at InCred Equities, said. The small cars segment registered negative growth throughout the financial year, but in December it grew 10%, he added. Meanwhile, SUVs had performed well throughout the year with double-digit growth but posted single digit growth this December, he said. 

Talking about valuations, Eicher Motor, Bajaj Auto, and Hero MotoCorp are at comfortable valuations, an analyst at a domestic brokerage said. In the commercial vehicle space, Eicher Motors is expected to outperform its peers, Nirmal Bang said in its pre-earnings report. In the two-wheeler segment, TVS Motors and Hero Motocorp will see improvement in operating margin. For tyre makers, Nirmal Bang expects mid-single digit volume growth on year. 

"Seems difficult for Nifty Auto to touch 24,000 immediately for the time being as the base trend is negative," Riyank Arora, technical and derivatives analyst at Mehta Securities, said. "We can see a minor pull towards 23500 on the back of slight short covering coming in on the index. Outliers among the stocks are Hero MotoCorp, Ashok Leyland, and Maruti Suzuki and will likely outperform on the back of strong technical set up on charts." Arora expects Nifty Auto to find support at 22000 and face resistance at 23100.

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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

US$1 = INR 86.61

Reported by Gopika Balasubramanium

Edited by Akul Nishant Akhoury

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