Nifty Auto outperforms as Maruti and MM jump; Tata Motors and Ashok Leyland most active

Auto stocks

Auto stocks

Auto stocks edged higher intraday on March 15 with Nifty Auto outperforming by adding over a percent in a market which is trading flat amid volatility.

Nifty Auto at 12:35 hours is up 1.25 percent led by heavyweight Maruti Suzuki which jumped 3 percent followed by Mahindra & Mahindra which gained over 2 percent. Other gainers include Bharat Forge, Ashok Leyland, Tata Motors and Bajaj Auto which added 0.5-1 percent each.

Among auto names, Tata Motors was the most active on NSE at 12:45 hours, with 2,92,06,889 shares being traded followed by Ashok Leyland (1,72,69,102).

Shares of Maruti Suzuki are in focus after the government on March 11 finalised more than 70 companies for auto components PLI (production-linked incentive), according to a report by CNBC-TV18.

Prominent names such as Maruti Suzuki, Toyota Components, Delphi TVS, Hella India, Dana Group, Bosch, Minda Industries, Tata Auto Components, Bharat Forge are on the list, the report added.

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Among the components selected for PLI, around 8-13 percent include safety items, flex fuels, CNG, LNG, emission control devices, passenger convenience items, fuel efficiency components and sensors, while 13-18 percent constitute parts of hydrogen and electric vehicles.

The passenger and commercial vehicle segments have seen relatively robust demand, which is likely to sustain despite multiple challenges.

“In the PV (passenger vehicle) space, notwithstanding the near-term supply-related challenges, demand outlook is improving with preference for personal mobility, while new launches have also been met with strong consumer sentiments,” said Sanjeev Hota, head of research, Sharekhan by BNP Paribas.

On the commercial vehicle side, growth outlook is supported by overall economic recovery led by construction and infrastructure sectors.

Auto stocks have been under pressure after The Federation of Automobile Dealers Associations (FADA) announced on March 4 that overall vehicle retail sales had fallen 9.21% year on year in February 2022 and 20.65% versus the same month in 2020.

Year on year, three-wheeler and commercial vehicle retail sales increased 16.64 percent and 7.41 percent respectively whereas two-wheeler and passenger vehicle retail sales decreased 10.67 and 7.84 percent respectively. Tractor retail sales fell 18.87 percent.

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