ET Markets
12,248.2567.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

Maruti rocks in auto show; stay put for more: Experts

The BSE Auto index gained 2.4% to end at 22774.95, outperforming the Sensex that rose 1.3%. Maruti Suzuki shares rose 3.7%, emerging as the top gainer on the Sensex.

, ET Bureau|
Updated: Oct 04, 2016, 08.07 AM IST
0Comments
Analysts said sales numbers were higher in September partly due to base effect as Diwali is being celebrated 10-15 days earlier this year. Analysts said that wholesale growth has been higher than retail in September.
Analysts said sales numbers were higher in September partly due to base effect as Diwali is being celebrated 10-15 days earlier this year. Analysts said that wholesale growth has been higher than retail in September.
MUMBAI: Automakers were in the spotlight on the bourses on Monday due to better-than-expected sales numbers for the month of September, with shares the country's largest car maker Maruti Suzuki India hitting a record high after posting its biggest monthly sales growth in two years. Analysts said investors should stay put in these stocks despite rich valuations due to strong growth prospects.

The BSE Auto index gained 2.4% to end at 22774.95, outperforming the Sensex that rose 1.3%. Maruti Suzuki shares rose 3.7%, emerging as the top gainer on the Sensex after the company said its sales increased 31% last month. The domestic sales were the highest ever in September in terms of absolute volumes. Others such as Ashok Leyland, Eicher Motors, Hero MotoCorp, Tata Motors, Bajaj Auto and Mahindra & Mahindra rose 1-4%.

“Festive season is expected to be good, monsoons have been good and 7th Pay Commission payouts have started, which should drive volume growth,“ said Mahesh Patil, co-chief investment officer, Birla Sunlife MF .

Analysts said sales numbers were higher in September partly due to base effect as Diwali is being celebrated 10-15 days earlier this year. Analysts said that wholesale growth has been higher than retail in September.

“It's likely that growth will moderate a bit post October with a higher base and inventory de-stocking playing a role,“ said Pranoy Kurian, senior analyst-institutional research, IDBI Capital.

Eicher Motors is trading at a trailing 12-month price to earnings ratio of 56.67. Maruti Suzuki, Hero Moto and M&M are trading at 35.28, 21.55 and 27.91 times, respectively .

“Valuation comfort is not there but there's earnings visibility. From a medium-term view one should remain invested,“ said Piyush Garg, CIO, ICICI Securities.

Kurian of IDBI Capital is bullish on Eicher Motors and Maruti Suzuki.
Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service