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Auto stocks: Time for some cool down and also an opportunity? 6 auto stocks with upside potential of upto 28%
It is the sector which has led the rally which the market has witnessed in the last 14 months and rightly so. If one looks at the history, the rallies which are led by the transportation and auto sector are more durable as sales of LCV and certain other auto segments is an indication of the economic situation on the ground. But there is another fact, which is that with a mad rush for stocks a number of them have seen sharp run with valuations moving upward sharply. There is no doubt that the Indian auto sector is going through a transformation and Indian companies are adjusting to it very well. So there is a situation, while the fundamentals are good and improving, valuations have seen a run up. So, there is a likelihood that we might see some cooling off, but that would bring an opportunity for investors who have missed the bus.
Auto stocks, mirror of economic growth: The not so bullish analysts would be proven wrong ?
Analysts projects are not bullish, they hardly expect any gains, but the hard fact, sometimes staying glued to excel sheet and earning projections makes one cautious more than it is required. Even the recent price moves are indicating that the street is getting ready to re-rate part of the auto sector, or rather has already done it. Whether it be large OEM or auto ancillary companies. Should one be ready to ignore the pessimism of analysts and move to take exposure for both a tactical trade and long term investment ?
Stocks from different parts of automobile ecosystem, 7 with buy reco and upside potential of 15-44% over one year
One sector which has been firing on all cylinders has been the auto sector, it started with stocks like Ashok leyland, Tata motors, Eicher motors.doing extremely well in the first phase of auto sector bull run.Then it was companies from the tyre sector which saw a sharp upward trend and then a select few auto ancillary stocks. It was in the third phase where 4 wheeler and 2 wheeler companies joined the bull run. One of the reasons why there has been a difference between different segments joining the rally at different stages has been the fact that each segment has been adjusting to the transformation to the EV space. The adjustment process is still on, so rather than taking exposure to a single stock it would be better to have a look at the basket of the stocks and have a mix. There are some stocks which are not been looked favorably by analysts as they believe that stocks have seen a run up but the fact remains that as sector one of the best proxy for taking exposure to economic growth.
A play on economic growth and transformation: 7 auto stocks from different segments with upside potential of up to 41%
Unlike the US and some other western countries, where a separate transportation index is watched very closely, in India we don't have a very popular transportation index. The reason why transportation index numbers are extremely important is because there is enough historical evidence to show that auto industry numbers lead indicators of what is happening in the economy. If one looks at the history of the stock market, the rallies which are led by the transportation and auto sector are more durable rallies. Especially the ones which are led by large commercial vehicles. The reason, sales of LCV and certain other auto segments is an indication of the economic situation on the ground. Demand for large commercial vehicles would only increase when there is higher economic growth as more goods get moved from one place to another when the economy is doing well.
Narrative or Reality: This ratio is better guide for long term investors
As the market corrects and stays volatile, one justification which is likely to come to market would be comparing current price multiple of stocks to average price earning multiple it was getting till a few months back and investment case would be made. However, relying solely on the P/E ratio for investment decisions can be misleading, as it may not accurately reflect a stock's true value, particularly in cases where a stock seems inexpensive based on this metric alone. The Price/Earnings to Growth (PEG) ratio emerges as a more refined tool for long-term investments.
Better to look them as a chain: 15 stocks from different part of automobile ecosystem, 7 with buy reco and upside potential of up to 32%
If one takes June - July 2020 as the base from where this bull run started. Amongst the first to gain were stocks like Ashok leyland, Tata motors, Eicher motors. There was good enough reason for it, all these companies get a significant part of their sales from either heavy commercial vehicles or light commercial vehicles. Sales of LCV and certain other auto segments is an indication of the economic situation on the ground. Demand for large commercial vehicles would only increase when there is higher economic growth as more goods get moved from one place to another when the economy is doing well. So it is LCV and HCV which are the lead indicators of what is in store for the economy. But behind the finished automobile product there is a huge supply chain, right from an auto ancillary unit making forgings, to a tyre maker. Rather than look at one segment it would be worthwhile to look at select stocks which form the part of the chain. The reason, when LCV will indicate good numbers, then means subsequently there would be better car and two wheeler numbers.
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These auto sector stocks can deliver more than 17% return in next one year
Unlike the US and some other western countries, where a separate transportation index is watched very closely, in India we don't have a very popular transportation index. The reason why transportation index numbers are extremely important is because there is enough historical evidence to show that auto industry numbers lead indicators of what is happening in the economy. That is why if one looks at the history of the stock market, the rallies which are led by the transportation and auto sector are more durable rallies. Especially the ones which are led by large commercial vehicles. Demand for large commercial vehicles would only increase when there is higher economic growth as more goods get moved from one place to another when the economy is doing well. But as the stocks have done well in the recent past, it is time to be selective at least in the near term.
Stock picks of the week: 5 stocks with consistent score improvement and upside potential of up to 34%
It might be a bit early to say, but there are indications that bulls might take some rest, but surely there are signs that some profit booking is already underway in the market. Unlike the last few months, where market breadth was a stand out feature, in the last few sessions even that has come under pressure. For investors who are looking to increase their exposure to stocks, it would be better to focus on fundamentals and if there is any improvement in them which has made the overall score go up in the last one month then have a look at those stocks. These selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.
These auto sector stocks can deliver more than 15% return in next one year
If one looks at the history of the stock market, the rallies which are led by the transportation and auto sector are more durable rallies. Especially the ones which are led by large commercial vehicles. The reason, sales of LCV and certain other auto segments is an indication of the economic situation on the ground. Demand for large commercial vehicles would only increase when there is higher economic growth as more goods get moved from one place to another when the economy is doing well. But as the stocks have done well in the recent past, it is time to be selective at least in the near term.
Nifty Auto index stocks: Time for some cool down before the next leg is led by EV launches?
It is the sector which has led the rally which the market has seen in the last one year. However today when newspaper headlines are talking about India witnessing sales of 4 million cars in 2023, all these major auto stocks are trading with a cut. This is a very simple example of the market discounting the news much before it comes out. The question is whether this correction is just a minor phase of cooling down and the next phase of up move will depend on their EV products.
Nifty Auto index stocks: Time for some cool down?
It is the sector which has led the rally which the market has witnessed in the last eight months and rightly so. If one looks at the history, the rallies which are led by the transportation and auto sector are more durable as sales of LCV and certain other auto segments is an indication of the economic situation on the ground. But given the fact too much liquidity is floating in the markets, some of the stocks have seen a sharp run with valuations moving upward sharply. That is probably the reason why analysts, while being bullish, are more cautious. So at a time when the desire to own stocks and invest is very high, it would be worthwhile to be slightly more watchful.
Nifty Auto index stocks: Time for some cool down?
It is the sector which has led the rally which the market has witnessed in the last eight months and rightly so. If one looks at the history, the rallies which are led by the transportation and auto sector are more durable as sales of LCV and certain other auto segments is an indication of the economic situation on the ground. But given the fact too much liquidity is floating in the markets, some of the stocks have seen a sharp run with valuations moving upward sharply. That is probably the reason why analysts, while being bullish, are more cautious. So at a time when the desire to own stocks and invest is very high, it would be worthwhile to be slightly more watchful.
Aditya Birla Insurance Brokers' senior execs quit over Samara Capital deal
Current CEO and principal officer, Sandeep Dadia, head of corporate business Irfan Shirwani, and head of reinsurance, Mukul Bhatia, are among those that have quit since the change in ownership. Other senior executives of the existing team, Ajay Prabhu, Punit Pancholi and Dhananjay Acharya, have also quit, three sources said.
Nifty Auto index stocks: Next winner might come earlier than expected
There has been a lot of talk about startups taking the space in the EV, but the fact is the old companies have also been working towards their EV plans. Given the amount of cash they are sitting with in their balance sheet, there is high probability that they will be able to launch a number of models out of which some would be successful and become the cash cows and deliver growth. So, don't write off the ability of big players, especially in two wheeler space as they might be close to getting their mojo back.
Nifty Auto index stocks: New EV policy will change the landscape even for ICE players
There have been lots of reports on how the EV policy will focus on bringing TESLA to India. While one single player will get the limelight, more important will be on building an ecosystem, where EVs are made in India not only for the Indian market, but over a period of time they are exported from India. It is very likely that over the next couple of quarters, there would be some re-rating of select auto stocks. Of the ones which have put their system in place to move into EV space.
8 capital goods & insurance stocks that can be wealth creators: Sanjiv Bhasin
“In the capital goods space, Cummins, Thermax, Bharat Forge and L&T are four of the choicest names. You can add an ABB. Three insurance names – SBI Life, ICICI Pru, and HDFC Life – in tandem could be very good wealth creators over a period of time and this distribution channel, particularly brokers, exchanges, insurance and the AMCs are a very good long-term bet.”
Nifty Auto index stocks: New EV policy will change the landscape even for ICE players
It is very likely that a new EV policy is on its way. Will it have financial incentives for existing players or will it focus on building an ecosystem, where EV are made in India not only for the Indian market, but over a period of time they are exported from India needs to be watched. The reason, if it is about building an ecosystem, it would have a long term positive impact on the auto ancillary industry. It is very likely that over the next couple of quarters there would be some re-rating of select auto stocks.
Getting ready for volatile times ahead? 5 largecaps with right mix of RoE & RoCE
Last four weeks, words like “ below estimates' 'have been heard on the Street multiple times. Given that valuations are not very cheap, any disappointment in the quarterly numbers has brought in corrections in the stock prices. Also given the fresh headwinds which have emerged in the global markets, right from the US banking sector to continued slowdown in China. focus might once again shift to large caps. ET screener powered by Refinitiv’s Stock Report Plus lists stocks with high upside potential over the next 12 months, having an average recommendation rating of “buy” or "strong buy"
Nifty Auto index stocks: Be selective with your pick as divergence glore
As the headwinds for the auto sector start to slow and the nifty auto index continues to outperform some of the other sectoral indices, we take a look at what analysts' views are on segments and sub-segments of the auto industry. Stock Reports Plus, powered by Refinitiv, is a comprehensive research report that evaluates five key components of 4,000+ listed stocks - earnings, fundamentals, relative valuation, risk and price momentum to generate standardized scores.
Top Nifty Auto Index stocks analysts suggest buying this week
Stock Reports Plus, powered by Refinitiv, is a comprehensive research report that evaluates five key components of 4,000+ listed stocks - earnings, fundamentals, relative valuation, risk and price momentum to generate standardized scores.
Roblox, Buzzfeed, other companies affected by Silicon Valley Bank collapse
Startup-focused lender SVB Financial Group last week became the largest bank to fail since the 2008 financial crisis, sending shockwaves through the global financial system and prompting regulators to step in to contain the fallout.
Tycoon Birla is said to weigh selling insurance brokerage unit
The sale is part of Aditya Birla Capital Chief Executive Officer Vishakha Mulye’s efforts to restructure the company’s businesses, which range from asset management to mortgage financing, in order to boost shareholder returns, the people said.
Why Paytm needs a partner
Paytm, which has been trying to acquire Raheja QBE General Insurance Company for a year, is now looking for a partner for its general insurance business in the hope that this will speed up regulatory approvals.
Institutionalising organ donation: Crack down on dubious "good Samaritans" that play middlemen
The buying and selling of kidneys is strictly prohibited by law in India, under The Transplantation of Human Organs Act, 1994 and invites harsh penalties.
Nifty hits lifetime high of 7809.20; top 20 trading ideas
The S&P BSE Sensex also pared most of its morning gains and was trading in a range, but above its crucial psychological level of 26000.
Pakistan prime minister Nawaz Sharif's trip to New Delhi sent multiple signals
Pakistan’s India policy has been the exclusive preserve of its civilmilitary bureaucracy. In the past six years, there has been a gradual shift.
IDFC surges 8%, then erases all gains as it gears up for bank licence: a buy?
"Valuations are undemanding and have lower execution risk versus IDFC, given established franchises. We remain neutral on IDFC," says Goldman Sachs.
Sensex posts triple-digit losses; top 20 trading bets from experts
The Sensex slipped over 100 points in trade on Friday, led by profit booking seen in frontline stocks such as ICICI Bank, HDFC Bank, ITC and HDFC.
Narendra Modi fever grips UP: Prominent SP, BSP leaders to formally jump on Modi bandwagon
SP member from Bulandshahr, Kamlesh Valmiki, is routinely spotted with BJP leader Kalyan Singh. Valmiki is likely to figure in the list.
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