6 Auto Stocks To Buy As Recommended By Sharekhan For Good Returns

Sharekhan has listed 6 auto stocks to buy in its recent report on the auto sector. The brokerages enquires with dealers suggest a healthy demand for passenger vehicles.

Monthly dispatches expected to be strong for Dec 2022

According to Sharekhan Monthly dispatches during December 2022 are expected to remain strong on y-o-y basis, led by continued growth momentum, across segments. On a sequential m-o-m basis, the dispatches are likely to decline across segments, except CV segments. Retail sales and order bookings continue to rise, on back of pent-up demand, positive rural sentiments and returning of entry-level consumers for two-wheeler (2Ws) as well as passenger vehicle (PV) segment. "We remain positive on demand outlook for the automobile industry, with PV segment leading, followed by 2Ws, commercial vehicles (CVs), three-wheelers (3Ws), and tractors in December 2022," Sharekhan has said.

6 stocks to buy from the auto space

Sharekhan has suggested buying a few stocks from the auto space. "In the OEM space, we prefer rural-centric companies with a strong balance sheet. In the 2W space, we like Hero MotoCorp, TVS Motor and Eicher Motor, led by successful new launches, positive sentiments in rural and semi-urban areas, and comfortable valuations. In the tractor segment, we like M&M, given its leadership position in the tractor segment and its continued strong performance in other segments such as LCVs and utility vehicles (UV). We also prefer Escorts Kubota, aided by a strong balance sheet with high cash and its synergies with Kubota Corporation. We like Maruti Suzuki," the brokerage has said.

2-wheeler space: Sharekhan likes Hero MotoCorp

According to Sharekhan Hero MotoCorp's volumes are expected to report to ~4.2 lakh units in December 2022, an improvement of 7.2% y-o-y and 8.2% m-o-m. "We remain positive on Hero MotoCorp and expect it to deliver strong sales in FY23E and FY24E, aided by recovery in rural markets. Hero MotoCorp remains focused on exports, premium bikes, and scooters, which are the company's new revenue drivers," the brokerage has said.

"Hero MotoCorp is expected to introduce at least eight new variants, starting with the Xtreme 160R Stealth 2.0 edition, to be followed by the refreshes and new colour schemes of popular models such as HF Series, Splendor+ and Glamour. The management expects huge demand from rural markets, led by a massive increase in customer inquiries and footfalls," the brokerage has said.

Sharekhan suggests buying TVS Motor Corp

According to Sharekhan, TVS Motors' dispatches are expected to show a growth of 6.2% y-o-y at 2,66,500 units, led by steady demand in rural and urban areas. "The 2W segment is expected to a grow 7.1% y-o-y, led by 23% growth in domestic demand, partially offset by 17.8% decline in exports. The increasing traction electric vehicles December 28, 2022 3 Sector Update will continue to help the company's retail sales. Exports were impacted due to macro-economic factors in certain international markets, where the company sales are expected to remain moderate in the near term," the brokerage has said.

Disclaimer

The stock has been taken from the brokerage report of Sharekhan on the automobiles sector. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any