According to Fitch, auto volumes are expected to recover partly in the second half of the ongoing financial year as sales gradually increase after the easing of lockdown measures since May.
The Indian stock market continues trading in the green but is off the day's high with Sensex is up 21.04 points or 0.06% at 35451.47, and the Nifty up 2.00 points or 0.02% at 10473 at 11:15 hours.
Among the sectors, the auto index added a percent led by Hero MotoCorp which jumped 4 percent followed by Tata Motors, up 3 percent and Bajaj Auto which gained 2 percent.
Tata Motors stock was one of the most active on NSE in terms of volumes with 6,46,94,345 shares being traded. The stock price has already gained over 55 percent in the last 3 months and was quoting at Rs 108.60, up Rs 4.25, or 4.07 percent. It has touched an intraday high of Rs 110.80 and an intraday low of Rs 104.90.
Shares of Hero MotoCorp was trading with volumes of 62,762 shares, compared to its five day average of 45,371 shares, an increase of 38.33 percent. The stock has also jumped over 55 percent in the last 3 months and was one of the top index gainers.
The other auto gainers included Eicher Motors, Bosch and Amara Raja Batteries.
According to Fitch, auto volumes are expected to recover partly in the second half of the ongoing financial year as sales gradually increase after the easing of lockdown measures since May. It, however, said that the overall volumes could decline by more than 20 per cent in the year as customers choose to delay spending on big-ticket discretionary items amid a weak economic outlook and due to higher prices with BS-VI rollout.
"We expect, in particular, a sharper decline in the sales of medium and heavy commercial vehicles because of lower levels of private investment, weak mining activity amid subdued commodity prices and fewer new infrastructure projects," the ratings agency stated.
Angel Broking has a buy rating on Escorts with target at Rs 1,150 while LKP Securities has a buy on Mahindra and Mahindra with target at Rs 589 per share.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.WEBINAR: Tune in to find out how term insurance can provide risk protection during tough times. Register Now!
