Auto Stocks Outlook: Mixed next week; Bajaj Auto, Maruti may rise

[B. Karthick]

Auto Stocks Outlook: Mixed next week; Bajaj Auto, Maruti may rise
Saturday, Sep 6

Frontline automobile shares are seen mixed next week, and slight
easing in
weekly inflation during the past two weeks is likely to provide
support for
it.
Inflation rate for week to Aug 23 eased to 12.34% from 12.40% a week
ago,
and below street estimates of 12.44%.
In two-wheelers, Bajaj Auto may rise as the stock has been showing
strength on the charts.
Though its motorcycle sales for August were lower than a year ago,
the
company is eyeing a double-digit growth in the segment during second
half of
the current financial year.
Bajaj Auto has been moving up and has a positive bias. For the next
week, 618 becomes very crucial. If it stays above that, it could touch
639
rupees soon.
Hero Honda Motors on the other hand is likely to move in a range as
the
stock touched its 52-week high of 890 rupees this week. The stock has
gained
on the back of a 27% on-year growth in its August sales.
Shares of Tata Motors, which has been shrouded in controversy over
acquisition of land at Singur, where the plant for its small car Nano
stands,
are likely to move sideways next week.
The stock has no triggers right now and the Singur condition seems a
deadlock, which has already been factored in by the market. It will
move in
between 420 rupees and 450 rupees.
Maruti Suzuki India, which is likely to see increased sales during
the
festive season in September and October, are seen gaining with
resistance at
693 rupees.
Maruti is looking positive. If market stabilises, the stock could
rise
to 713 rupees and even to 725 rupees. It has support at 645 rupees.

Following are this week's prices, in rupees, of key automobile
shares
compared with previous week on National Stock Exchange:

Sep 5 Aug 29 Change (%)

Ashok Leyland 32.75 33.55 -2.38
Bajaj Auto 606.95 588.20 3.19
Hero Honda 860.25 828.70 3.81
Mahindra & Mahindra 582.85 578.65 0.73
Maruti Suzuki 680.25 649.60 4.72
Tata Motors 420.05 440.40 -4.62

BSE Auto Index 3,983.05 4,001.23 -0.45
Nifty 4,352.30 4,360.00 -0.18
Sensex 14,483.83 14,564.53 -0.55
End

B.Karthick
Research Analyst.