Auto Stocks Outlook: Mixed next wk; Tata Motors, Hero Honda up
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K.Karthik Raja
Feb 2, 2008, 1:06:14 AM2/2/08
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Auto Stocks Outlook: Mixed next wk; Tata Motors, Hero Honda up
Frontline automobile shares are seen mixed in the coming week
with Tata Motors and Hero Honda Motors leading gains.
Both companies reported a better-than-expected performance in the
December quarter.
"Overall, the auto sector has seen strong buying last week,
volumes
are increasing, especially in Hero Honda, Tata Motors, and Maruti. The
sector may even be re-rated next week.Tata Motors is seen touching
800-823 rupees next week, with crucial resistance at 830 rupees.
The company reported a 2.8% decline in its Oct-Dec net profit at
4.99 bln rupees. However, the company's earnings were above estimates.
Also, Tata Motors' January sales were 54,796 units, topping 50,000
units for the first time in 2007-08 (Apr-Mar).
Research recommends investors to watch movement in Hero Honda
Motors, as it is likely to touch 752 rupees and then 775 rupees this
week.
Hero Honda's December quarter net profit rose 32% to 2.75 bln
rupees due to stable commodity prices. The company's January sales
were 298,050 units, rising marginally on-year.
Also investors are optimistic that vehicle loan rates may reduce
as the Reserve Bank of India may cut its key interest rates following
the U.S. Federal Reserve's decision late Wednesday to cut the Fed
funds rate by 50 basis points.
Another event eyed will be the Cabinet meet next week to decide
the fuel price hike. However, most analyst said the much-talked-about
increase is unlikely to move stock prices.
Maruti Suzuki is seen positive next week with resistance at
920-930
rupees in cash. "If it crosses 920 rupees, next target will be 945-950
rupees.
Ashok Leyland, and Mahindra & Mahindra are seen moving sideways
next week.
While Ashok Leyland could drop to 28-29 rupees within the week,
M&M is seen moving in a range of 645-752 rupees. M&M reported a 12% on-
year growth in its January sales at 22,309 vehicles.
"Bajaj Auto should test 2,619 rupees on the upside in the next
week. It has support at 2,310 rupees.
Following are this week's prices, in rupees, of key automobile
shares
compared with previous week on National Stock Exchange:
Feb 1 Jan 25 Change (%)
Ashok Leyland 34.85 37.50 -7.07
Bajaj Auto 2,449.35 2,255.50 8.59
Hero Honda 728.35 691.20 5.37
Mahindra & Mahindra 671.00 673.10 -0.31
Maruti Suzuki 905.75 833.70 8.64
Tata Motors 753.50 710.45 6.06
.
BSE Auto Index 5,003.61 4,842.87 3.35
Nifty 5,317.25 5,383.35 -1.23
Sensex 18,242.58 18,361.66 -0.65
Frontline automobile shares are seen mixed in the coming week
with Tata Motors and Hero Honda Motors leading gains.
Both companies reported a better-than-expected performance in the
December quarter.
"Overall, the auto sector has seen strong buying last week,
volumes
are increasing, especially in Hero Honda, Tata Motors, and Maruti. The
sector may even be re-rated next week.Tata Motors is seen touching
800-823 rupees next week, with crucial resistance at 830 rupees.
The company reported a 2.8% decline in its Oct-Dec net profit at
4.99 bln rupees. However, the company's earnings were above estimates.
Also, Tata Motors' January sales were 54,796 units, topping 50,000
units for the first time in 2007-08 (Apr-Mar).
Research recommends investors to watch movement in Hero Honda
Motors, as it is likely to touch 752 rupees and then 775 rupees this
week.
Hero Honda's December quarter net profit rose 32% to 2.75 bln
rupees due to stable commodity prices. The company's January sales
were 298,050 units, rising marginally on-year.
Also investors are optimistic that vehicle loan rates may reduce
as the Reserve Bank of India may cut its key interest rates following
the U.S. Federal Reserve's decision late Wednesday to cut the Fed
funds rate by 50 basis points.
Another event eyed will be the Cabinet meet next week to decide
the fuel price hike. However, most analyst said the much-talked-about
increase is unlikely to move stock prices.
Maruti Suzuki is seen positive next week with resistance at
920-930
rupees in cash. "If it crosses 920 rupees, next target will be 945-950
rupees.
Ashok Leyland, and Mahindra & Mahindra are seen moving sideways
next week.
While Ashok Leyland could drop to 28-29 rupees within the week,
M&M is seen moving in a range of 645-752 rupees. M&M reported a 12% on-
year growth in its January sales at 22,309 vehicles.
"Bajaj Auto should test 2,619 rupees on the upside in the next
week. It has support at 2,310 rupees.
Following are this week's prices, in rupees, of key automobile
shares
compared with previous week on National Stock Exchange:
Feb 1 Jan 25 Change (%)
Ashok Leyland 34.85 37.50 -7.07
Bajaj Auto 2,449.35 2,255.50 8.59
Hero Honda 728.35 691.20 5.37
Mahindra & Mahindra 671.00 673.10 -0.31
Maruti Suzuki 905.75 833.70 8.64
Tata Motors 753.50 710.45 6.06
.
BSE Auto Index 5,003.61 4,842.87 3.35
Nifty 5,317.25 5,383.35 -1.23
Sensex 18,242.58 18,361.66 -0.65
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