Auto Stocks Outlook for the week – 06 to 10.02.2017
Auto Stocks Outlook for the week – 06 to 10.02.2017
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Stocks of most automobile companies are seen rising next week, with the Bajaj Auto Ltd stock likely to be in focus. Investors are confident about a revival in the rural economy after the government announced a better-than-expected outlay for this segment in the Budget for 2017-18 (Apr-Mar). The government allocated 1.87 trln rupees for the rural, agriculture, and allied sectors. This is expected to benefit the automobile sector in the coming months, as a cash crunch after demonetisation pulled demand down across the industry. In the long run, two-wheeler manufacturer Hero MotoCorp Ltd and tractor maker Mahindra & Mahindra Ltd are likely to benefit the most from the boost to rural spending. In addition, with a 3.96-trln-rupee plan for the infrastructure sector, commercial vehicle makers such as Ashok Leyland Ltd and Tata Motors Ltd are also expected to see a boost to their bottom lines. Next week, investors will track Bajaj Auto, as stocks of the two-wheeler company didn't shown much of a reaction to the company's better-than-expected earnings for Oct-Dec, announced this week. The automaker's net profit for Oct-Dec slipped 5% on year but managed to beat estimates. Analysts expected the company to report weak earning due to the company's significant presence in rural areas. Stocks of Maruti Suzuki India Ltd are seen up next week, after the stock recorded its highest-ever level of 6,218.35 rupees. Stocks of Hero MotoCorp and Ashok Leyland are likely to trade with a positive bias next week. The Nifty Auto index is expected to trade within a narrow range.
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Auto Stocks Outlook for the week – 06 to 10.02.2017
