Quality auto stocks are in top gear these days, due to surging quarterly sales, easing of semiconductor shortages and the EV theme attracting foreign investments, pushing the Nifty Auto index to record highs. Nifty Auto index is trading today at 13,155 after making an intraday high of 13,206, nearly 130 points away from its 52-week high of 13,336.
According to Share Market According to experts, the Nifty Auto Index is showing bullish momentum on the chart pattern and it can go up to the level of 14,000 in the short term. He added that the index has strong support at 12,700 levels and any fall in the index should be viewed as a buying opportunity in quality auto stocks like Tata Motors, Maruti Suzuki India Ltd, Mahindra & Mahindra (M&M) etc. .
Speaking on the fundamentals boosting auto stocks and Nifty Auto Index, Shriram Ramdas, Vice President, Green Portfolio, said, “The market leaders – Maruti, Mahindra & Mahindra and Tata Motors have seen consistent double-digit growth in quarterly sales The world economy is reeling in gloom. Semiconductor shortages were a hindrance to these names because they were lagging behind on production schedules. Fast forward to today, the demand-supply scenario is over, the semiconductor shortage has waned. has gone up, and automobile names are pre-distributed above the epidemic volume.”
Shriram Ramdas of Green Portfolio further said that key commodity inputs used by the auto sector have fallen by 30 per cent to 40 per cent from their peak. Margins are expected to fall again on softening commodity prices.
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Anticipating further rise in Nifty Auto Index, Sumeet Bagdia, Executive Director, Choice Broking said, “Nifty Auto Index is bullish and may touch 13,500 levels in the immediate term while it may reach 14,000 levels in the short term. If there is a major correction in the index or if there is a major correction in heavyweight auto stocks like Tata Motors or Maruti Suzuki India Ltd., then investors should look at buying opportunities. These two autos The shares are around 33 per cent of the net index strength (Maruti 19.50 per cent. Tata Motors 13.50 per cent) and are expected to boost the Nifty Auto index in the short to medium term.”
“Craftsman Automation and Mahindra CIE are components that we prefer to have in our portfolio. EV order book build-up and current valuation levels in both these businesses underpin our confidence,” said Ramdas of Green Portfolio.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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