Near-term headwinds may cap upsides for auto stocks, especially 2-wheelers

Price hikes, running costs and supply side pressures are the key concerns

Shares of automobile and ancillary companies entered the fast lane on Monday after automakers, over the weekend, posted December sales figures, which were in line with expectations.

Shares of Tube Investments of India, for instance, surged 7.7 per cent, while those of Eicher Motors, Ashok Leyland, Tata Motors, Bharat Forge, and Maruti Suzuki India gained between 1.4 and 4.6 per cent. Exide Industries, Hero MotoCorp, Bajaj Auto, TVS Motor, and MRF, too, gained up to 1 per cent.

The sector, especially two-wheeler makers, however, may not be entirely out of the woods yet and can have a bumpy road ahead, cautioned analysts,