Since it believes that the Indian vehicle market has shown a significant surge in demand, with most categories showing optimistic development, Axis Securities, a domestic brokerage and research firm’s perspective on the industry, is “overweight.” Axis Securities has this view because it predicts that demand for automobiles in China will continue to fall gradually but steadily.
According to the study’s findings, the long-term picture for the automobile industry remains optimistic. Many businesses have the potential to grow significantly from their current positions if demand drivers are in place. Bajaj Auto, Maruti Suzuki India Ltd, and Ashok Leyland Ltd. are three of Axis Securities’ top stock recommendations in the automotive industry. Ratings are a must for all three automakers and are regarded as industry leaders. At 9,800, Maruti Suzuki India and Ashok Leyland have a target pricing for their respective vehicles. The Bajaj Auto price point is $4,200. In the words of the author.
Since Bajaj Auto delivers competitive costs and has excellent growth prospects over the medium to long term, the company maintains that it is its top pick in the 2W market. If Bajaj Auto takes advantage of demand normalization and premiumization tendencies in the 2W industry, it should boost its profitability and operating results.
A recent product release and a well-diversified portfolio, according to Axis Securities, put Ashok Leyland in an excellent position to gain from the CV cycle’s strong resurgence. Ashok Leyland’s portfolio is well-diversified, which is why this is the case. In the fourth quarter of fiscal year 22 (Q4FY22), automotive companies displayed outperformance, producing better-than-expected earnings. For the fourth quarter of fiscal year 22, the automobile industry performed better than projected. As a result of a better product mix, higher realizations, cost management strategies, and increased volume providing positive operating leverage, this was made achievable. According to the brokerage business, new car releases are expected to pique consumer interest. The industry expects new models to be released shortly to keep buyers interested in SUVs. It was revealed in the study that the commercial vehicle (CV) market is expected to maintain its demand momentum. We expect the CV cycle to continue at its current pace due to increased economic activity and a focus on infrastructure by the government.
In addition, a tariff on steel exports might boost the profit margins enjoyed by automobile makers. Profits are expected to rise due to corporations seeking to preserve their competitive advantage. The brokerage firm has changed the sector’s position from Equal-weight to Overweight due to recent developments and an optimistic forecast.
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