Sharekhan remains optimistic on the performance of the auto sector and has recommended a few stocks from the space as a good buy. "The faster rollout of vaccinations will augur well for economic recovery. As far as demand is concerned, we expect pent-up demand will continue to drive growth for the automobile sector from Q2FY2022. Automobile companies expect semi-conductor supply issues to gradually improve from H2FY2022," the brokerage has said. Here are 4 stocks that are on the buy list of Sharekhan.
1. Ashok Leyland
|Current market price||Rs 120.20|
|Target price||Rs 151|
Sharekhan has a price target of Rs 151 on the stock of Ashok Leyland. “The company reported weak results for Q1FY2022, marred by lower volumes due to lockdown restrictions. We expect Ashok Leyland profitability to improve significantly, with its EBITDA growing at a 159% CAGR for FY2021-FY2023E, aided by robust 38.2% revenue CAGR and sharp margin expansion. We maintain estimates and price target,” the brokerage has said.
2. Bajaj Auto
|Current market price||Rs 3698|
|Target price||Rs 4800|
The brokerage also has listed the shares of Bajaj Auto as a “buy”. “Bajaj Auto’s Q1FY2022 revenue and PAT were in line with estimates, while EBITDA margin missed expectations. Management remained positive on growth prospects, especially exports, where the company expects to gain market share in key regions, driven by brand recall, product launches, and value-for-money proposition. We maintain our estimates and price target,” Sharekhan has said.
Mahindra and Mahindra
|Current market price||Rs 775|
|Target price||Rs 1000|
Sharekhan has a buy call on the stock of tractor major, Mahindra and Mahindra with a price target of Rs 1000. “Q1FY2022 results slightly lagged expectations due to lower than-expected profitability in the automotive business. Adjusted standalone PAT declined by 6.8% q-o-q to Rs. 934 crore. We maintain our estimates and price target for the stock, factoring positive outlook for its core businesses and improving performance of key subsidiary companies,” the brokerage has said.
|Current market price||Rs 6628|
|Target price||Rs 8587|
For Q1FY2022, Maruti Suzuki reported weak and below expectations results due to a sharp drop in EBITDA margin. We expect strong volume recovery ahead, which would improve revenue and profitability. We maintain our estimates and price targets,” Sharekhan has said.
The above stocks are based on the report of Sharekhan. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor