Money on the markets

A maturing market amid the mayhem

Auto stocks on a roll

July 29, 2009

INDIA-HYUNDAI/The past two months have been exciting for auto stocks. Helped by better car sales and solid earnings by auto companies, the BSE Auto Index has gained over 20 percent since June, a sharp contrast to the Sensex’s meagre gain of around 4 percent over the same period.

Car sales in India jumped an annual 7.8 percent in June, climbing for a fifth straight month and signifying that demand for autos was picking up.

Automakers have also posted solid Q1 numbers. Maruti Suzuki’s net profit rose 25 percent and the company said it was optimistic about its future growth.

Maruti’s results surprised the market and its shares closed near the all-time high on the result day. The stock has given returns of over 35 percent in the past two months on absolute basis.

Tata Motors too posted an unexpected rise of 58 percent in Q1 profits. Its stock has risen by over 30 percent this month.

Do you think this rally in autos is a strong cue for investing in the market now?

Comments

Nano car is going to change market dynamics of auto industry.Nano car is going to meet aspirations of India’s large number of middle class families as they shift preference from 2-wheeler vehicles to 4-wheelers.TVs,refrigerator and now Nano are going to be a must for every household.

Not only auto industry but also OEMs are going to benefit from a dramatic demand.

Certainly a time to pick up auto stocks.

Posted by A.Kapoor | Report as abusive
 

But i wonder if it will be able to sustain when markets correct.. Anyways.. good time for long term investors to pick quality stocks slowly..

Posted by Aditya | Report as abusive
 

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