Auto stocks lifted the benchmark index Nifty50 into the positive territory as they gained up to 9 percent in the morning trade on Tuesday despite poor sales numbers reported by various auto companies.
The Nifty Auto index surged 1.6 percent led by gains in Tata Motors, HeroMoto Corp, Ashok Leyland, TVS Motors, Eicher Motors and Maruti, up in the range of 1 percent to 7.5 percent. On comparison, Nifty50 was trading at 10,892, up 29 points or 0.27% percent.
Tata Motors gained as much as 9 percent to Rs 196 on NSE during intra-day trade as JLR February US auto sales was up 29 percent year-on-year. The company reported weak set of sales numbers for the month February 2019 in India. The company's commercial and passenger vehicles business sales in the domestic market declined 3 percent at 57,221 units as against 58,993 units in a year ago period.
However, brokerages remained positive on Tata Motors. Macquarie has maintained an 'Outperform' call with a target of Rs 260 per share, meanwhile Nomura has maintained its 'Neutral' call with a target of 187 per share.
"We maintain the neutral call factoring in a 12 percent decline in global wholesales for JLR in February and a 10 percent decline in the overall JLR volumes in FY19. Given tough market conditions in China, re-rating is not on the cards," said Nomura in a report.
On the other hand, Eicher Motors recovered after falling 3 percent in opening trade as global brokerage house Citi Research has maintained 'Buy' call on the stock, but slashed price target to Rs 24,700 from Rs 25,200 earlier. The price cut was after the brokerage house reduced its consolidated earnings estimates by 2-3 percent over FY19-21.
The stock was currently trading 1.9 percent higher at 20,329.
Among other auto stocks, Hero MotoCorp was up 3.16 percent, TVS Motors gained 2.8 percent, Ashok Leyland rose 2.3 percent and Maruti Suzuki advanced 0.8 percent in morning deals.