Samir Arora, founder and fund manager of Helios Capital, has advised against investing in the automobile sector this year saying "auto is not a 2020 theme".
Auto sales data for December will be released today and the expectation is that the numbers will be weak this time as well. Sales in the commercial vehicle space will likely be extremely weak but in the passenger vehicle and two-wheeler space, some positives are expected.
The November auto sales data indicated minor green shoots but largely, the numbers remained weak. Maruti Suzuki, the country’s largest automaker, reported a nearly 2 percent drop in sales in November, while Mahindra and Mahindra (M&M) reported a 9 percent fall in its total sales. The numbers were even more startling for Tata Motors as it reported a 25.32 percent decline in total sales to 41,124 units.
"We will not buy (auto stocks) because some things are both cyclical plus structural," Arora told CNBC-TV18.
Talking about Vodafone-Idea, Arora said, “There are less than 23 days left for that company to present Rs 51,000 crore to the government and the government does not even say that 'in that case we are working with the company'."
Talking about the upcoming budget, he said that announcement on personal tax cut is the only key expectation from the budget.
When asked about Yes Bank, he said the bank’s resolution could also be a risk for the market.