Hero Honda Hogs The Limelight

The boom in the auto sector has pushed up prices of major scrips in this sector. One such auto scrip which hogged the limelight last week was Hero Honda. The price of the stock touched the 52-week high on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) regularly in the past week.

At both the exchanges, the price of the scrip gained over 27 per cent during the previous five trading days. According to a FII analyst, the strong fundamentals of the company is one reason the investors are bullish on the scrip. This apart, on the fuel-efficiency front the vehicles introduced by Hero Honda have performed better. Thus, even in the eventuality of a petro-hike, the company will continue to be a market leader, said an auto analyst.

 

The Hero Honda scrip closed at Rs 333.50 at the BSE on Monday last. The volumes too surged to greater heights on that day. Trading volumes for the stock at the BSE surged to 11,000 shares on Tuesday from the 3450-levels witnessed on Monday.

Similarly, the volumes at the BSE went up to 4,705 shares on Tuesday from 3,033 shares on Monday. Market sources pointed out that though foreign institutional investors (FIIs) were major buyers; local investors, including the domestic institutions were active at the Hero Honda counter.

FIIs are taking active interest at the Hero Honda counter, as they feel that the auto industry is now out of recession. The petro hike is imminent and customers will now be extra cautious when they decide to purchase a mobike. Here, Hero Honda will have an edge over its competitors as its models have outperformed on the fuel-efficiency front. This is one reason why investors are bullish on the scrip, said a leading broker.

By the end of the week, the volume of scrips traded on the BSE climbed to 47,102 shares on Friday from a mere 3,033 shares at the commencement of the week.

On the other hand, the trading volumes at the NSE went up to 42,400 shares on Friday from 3,450 shares traded on Monday.

According to market sources, the scrip will continue to move up in the days to come. There is some amount of speculative buying. However, the majority of buying is genuine, said another BSE broker.