Auto stocks in focus; M&M, Eicher Motors hit fresh 52-week highs

Shares of automobile companies were in focus at the bourses on Tuesday, with individual stocks rising up to 6 per cent. The Nifty Auto index, meanwhile, climbed as much as 2.25 per cent intra-day to 8,935 level and was the top sectoral gainer. In comparison, the Nifty50 index was trading 0.95 per cent higher, at 2 PM.

Among individual stocks, Mahindra & Mahindra gained 5.67 per cent to Rs 745.50, its fresh 52-week high, while Eicher Motors also hit its 52-week high level of Rs 2,715 on the NSE  In the past one week, M&M has outperformed the market by gaining 14 per cent, as compared to a one per cent rise in the S&P BSE Sensex. Analysts at Motilal Oswal Securities have a positive view on M&M owing to a strong recovery in tractors, LCVs recovering in the October-March period (2HFY21), and positive development on capital allocation.

Maruti Suzuki gained 3.66 per cent after announcing expansion of its vehicle subscription programme to Mumbai, Chennai, Ahmedabad and Gandhinagar with plans to expand it further in up to 60 cities over the next three years.

Meanwhile, Tata Motors, Hero MotoCorp, Bajaj Auto, Ashok Leyland, and TVS Motor were all up in the range of 1-3 per cent. 

Auto ancillary stocks also ticked up in intra-day trade today, with Bosch rising as much as 6.77 per cent at Rs 12,620. Exide, Amara Raja Batteries, and Motherson Sumi also gained over 1 per cent, each.

In a report dated November 2, Jefferies had said that passenger vehicles were witnessing strong demand in the festive season with registrations up 20 per cent year-on-year (YoY) in the first half of the month-long period.

For instance, car market leader Maruti Suzuki India delivered 37,000 cars between 12 and 14 November. This was not only marginally higher than last year, but also more than the average three days of sales since the last three years.

Tata Motors also said the company had witnessed a strong growth during the festive period. “Our bookings have increased by 95 per cent and retail sales have gone up by 90 per cent compared to the FY20 festive season,” a Tata Motors spokesperson said, adding that traction was equally good for both cars and SUVs. READ MORE