Experts say that fresh buying in auto stocks, especially M&M, Tata Motors, Hero Motocorp and Maruti Suzuki led to a surge in the Nifty auto index. The index is at 12,649.10 points, very close to its lifetime high of 12,660 levels.
The Nifty Auto Index has generated alpha returns as compared to the returns of the Indian stock market. The BSE Sensex and NSE Nifty 50 could deliver 7.62% and 7.97% returns respectively in the past month, however, the auto index has outperformed by giving 16.25% returns in the same period.
Experts say that auto stocks are rising because Indian millennials are upgrading their lifestyle after the Indian economy is opening up after the pandemic. As a result, auto sales numbers are increasing. Another major reason is the focus on the EV segment, which is attracting foreign investors.
The markets opened in the green on Friday and three auto stocks reached their respective 52-week highs:
Eicher Motors Limited
The shares of Eicher Motors surged 3.17% to reach their 52-week high of ₹3179.00 on Friday. The company’s share price has increased by 18.43% in the past month.
Analysts say that the market for two-wheelers throughout the world is still growing due to consumer desire for affordable, sustainable mobility options. Further, the availability of semiconductors is expected to return to normal and commodity costs are predicted to soften, which will help satisfy demand.
Emkay Global has a buy call on the shares of Eicher Motors with a target of ₹ 3,340. This translates to an upside of 6.16% as compared to its current share price of ₹ 3146.00.
TVS Motor Company Limited
The shares of TVS Motor Company Limited climbed 2.18% on Friday to reach their 52-week high of ₹ 898.70 apiece. The share price of the company increased by 20.24% in the past month.
According to analysts, the shares of TVS Motors have been increasing due to an increase in the sales of two-wheeler and three-wheeler electric vehicles. Moreover, the automobile sector is recovering after the pandemic and the semiconductor shortage caused as a result of the Russia Ukraine war. Most importantly, TVS Motors announced big plans to expand its electric two-wheeler capacity and charging infrastructure a few months ago. This led to a positive outlook as far as the stock is concerned.
ICICI Securities has a buy call on the shares of TVS Motor Company with a target price of ₹1023. This implies an upside of 15.39% as compared to its current share price of ₹ 886.50.
Bajaj Auto Limited
The shares of Bajaj Auto surged 0.52% today to reach their 52-week high of ₹ 4091.00 on Friday. The company’s share price has increased by 11.39% in the past month. The company had recently declared a buyback of its shares at a price of ₹ 4600 apiece.
Axis Securities has a buy call on the shares of Bajaj Auto with a target price of ₹ 4230. This indicates an upside of 4.13% as compared to the current share price of ₹ 4055.05.
Written by Simran Bafna
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