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Here are Motilal Oswal's top picks from auto sector

Updated : 2020-06-05 16:10:50

Domestic brokerage Motilal Oswal has come out with its top picks among the Indian automobile companies. Here are the brokerage’s top recommendations. (Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.)

 Maruti Suzuki  | Buy | Rs 5,850 | Motilal Oswal estimates FY21E volumes to decline 13.8 percent, YoY, implying a residual decline of 3.3 percent.
Maruti Suzuki | Buy | Rs 5,850 | Motilal Oswal estimates FY21E volumes to decline 13.8 percent, YoY, implying a residual decline of 3.3 percent. "We see downside risk to our volume estimates, owing to the uncertainty of recovery in 2HFY21," the brokerage said. (Image: Reuters)
 Mahindra & Mahindra  | Buy | TP: Rs 552 | The timely relaxation of the lockdown for the agricultural sector helped ensure the speedy recovery of tractor demand during May. In the near term, farmer sentiment is likely to remain positive due to several developments, including robust Rabi crop production, higher procurement, good price realisations and the forecast of a normal monsoon that bodes well for a good Kharif crop. All these augur well for tractor demand going forward, Motilal Oswal said.
Mahindra & Mahindra | Buy | TP: Rs 552 | The timely relaxation of the lockdown for the agricultural sector helped ensure the speedy recovery of tractor demand during May. In the near term, farmer sentiment is likely to remain positive due to several developments, including robust Rabi crop production, higher procurement, good price realisations and the forecast of a normal monsoon that bodes well for a good Kharif crop. All these augur well for tractor demand going forward, Motilal Oswal said.
 Ashok Leyland  | Buy | TP: Rs 61 | The company’s MHCV sales in May were down 97 percent and LCV sales declined 73 percent, YoY. The brokerage estimates volume growth to be flat in FY21E, implying residual growth of 26.1 percent.
Ashok Leyland | Buy | TP: Rs 61 | The company’s MHCV sales in May were down 97 percent and LCV sales declined 73 percent, YoY. The brokerage estimates volume growth to be flat in FY21E, implying residual growth of 26.1 percent.
 Escorts  | Neutral | TP: Rs 768 | The brokerage estimates 3 percent growth in volumes for FY21E, implying 10 percent residual growth or monthly run-rate of 8,100 units.
Escorts | Neutral | TP: Rs 768 | The brokerage estimates 3 percent growth in volumes for FY21E, implying 10 percent residual growth or monthly run-rate of 8,100 units.
 Eicher Motors  | Buy | TP: Rs 17,200 | The company started the second shift at Oragadam toward end-May 2020. Royal Enfield volumes are estimated to decline 4 percent in FY21E, while VECV volumes are expected to decline by 10 percent in FY21E.
Eicher Motors | Buy | TP: Rs 17,200 | The company started the second shift at Oragadam toward end-May 2020. Royal Enfield volumes are estimated to decline 4 percent in FY21E, while VECV volumes are expected to decline by 10 percent in FY21E.
 Hero MotoCorp  | Neutral | TP: Rs 2,072 | Nearly 5,000 customer touch-points of Hero MotoCorp have re-opened, contributing 85 percent of the company’s domestic sales. The company has retailed more than 160,000 units of motorcycles and scooters during May 2020, driven by demand in semi-urban/rural markets, with BS-VI vehicles witnessing positive customer response, the brokerage noted.
Hero MotoCorp | Neutral | TP: Rs 2,072 | Nearly 5,000 customer touch-points of Hero MotoCorp have re-opened, contributing 85 percent of the company’s domestic sales. The company has retailed more than 160,000 units of motorcycles and scooters during May 2020, driven by demand in semi-urban/rural markets, with BS-VI vehicles witnessing positive customer response, the brokerage noted.
 TVS Motor Company  | Neutral | TP: Rs 310 | The brokerage estimates volumes to decline around 15.7 percent in FY21E, implying a residual growth of 1.7 percent.
TVS Motor Company | Neutral | TP: Rs 310 | The brokerage estimates volumes to decline around 15.7 percent in FY21E, implying a residual growth of 1.7 percent.
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