Best Auto Stocks: Now the auto sector is slowly coming back on track after recovering from the lockdown. Demand is increasing in a private vehicle and tractor segments.
Auto Sector: The auto sector is slowly coming back on track after recovering from the lockdown. Demand is increasing in a private vehicle and tractor segments. Whole sale growth is expected to remain in double digits ahead. However, there is still pressure on commercial vehicles. Expert says that demand is better on annual basis in December 2020. Demand for vehicles is increasing in the infrastructure and construction sector along with private vehicles. The economy is improving rapidly. At the same time, interest rates remain at a low level. In such a situation, the auto sector, which has been under pressure for a long time, can prove to be the big winner.
Whole sale growth projected to be in double digit
According to brokerage house MK Global, Wholesale growth in the tractor, two-wheeler and private vehicle segment in December can be in double digit. Distinguishing of BS4 inventory in two-wheeler and private vehicle has made a favourite base. At the same time, wholesale growth in the tractor segment is also expected to be strong. Eicher Motors in particular is expected to grow 21 per cent and 19 per cent in Mahindra and Mahindra.
Talking about domestic two wheelers, TVS Motors, Bajaj Auto, Hindustan MotoCorp may see growth of 21 percent, 13 percent and 10 percent on an annual basis. At the same time, private vehicle industry can see 12 percent growth in volume annually. However, the effect of coronavirus has remained in the commercial vehicle segment and demand is sluggish.
According to the report of the brokerage house, now where demand has been better than before, companies have reduced the discount. In such a situation, now their profit is expected to increase. Auto companies will get the benefit of fast-improving economy and lower interest rates and these can prove to be winners.
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(Note: We have given advice here based on the report of the brokerage house. Seeing the risk of the market, consult the experts at your level before investing.)