Auto shares: Auto shares rise with gross sales in lots of areas fuelling hope

Mumbai: Shares of auto firms rallied on Monday in a weak market as stories of gross sales restarting in numerous pockets throughout the nation prompted buyers to choose up the battered names.

BSE Auto index climbed 4.2 per cent to shut at 12,867.45 led by TVS Motor, Hero MotoCorp, Tata Motors, Bajaj Auto, Maruti Suzuki India, Motherson Sumi, Ashok Leyland, Amara Raja Batteries and Balkrishna Industries, which gained 4-7 per cent. The Sensex fell 0.three per cent.

“Some firms have reported gross sales after resuming operations. This exhibits that demand for autos is coming again. Shared mobility and public transport are prone to take a beating after this pandemic, which is simply going to spice up auto gross sales,” mentioned Sanjiv Bhasin, director of IIFL Securities.


AK Prabhakar, head of analysis at IDBI Capital, mentioned gross sales from two-wheelers and entry-level vehicles may be larger due to the seemingly shift to non-public automobiles.

“Even second-hand auto gross sales market is prone to choose up. Money-rich firms reminiscent of Maruti and Hero may benefit. The Covid problem shouldn’t be going to go away in a rush and folks would need their very own automobile,” mentioned Prabhakar.

From February 1 until March 24, the BSE Auto index declined over 44 per cent to hit a 52-week low of 10141.45, however the index has recovered almost 27 per cent from that date.

Nitin Bhasin, head of analysis — Institutional Equities at Ambit Capital, mentioned buyers could probably take cues from what is occurring in China by way of demand after the economic system began once more. “These shares additionally got here off loads on worry of discretionary spend of individuals happening. It’s potential that folks could consider proudly owning personal transport than taking public transport,” mentioned Bhasin.

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