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Maruti Suzuki, Bajaj Auto, Tata Motors top picks: MOSt

Motilal Oswal has come out with its report on automobiles sector. According to the research firm, Maruti Suzuki India (MSIL), Bajaj Auto and Tata Motors among large caps, and TVS Motor Company, EIM and Ashok Leyland among midcaps are the top picks.

September 01, 2015 / 05:47 PM IST
 
 
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Motilal Oswal's report on automobiles sectorIn PVs, demand momentum continues to remain strong, with rise in number of enquiries leading to higher sales. Discounts are steady at ~INR16k for players like MSIL, especially in the petrol segment. For M&M discounts continue to remain high at INR40k-70k per unit.The entry level segment is expected to remain weak. However, new launches from Honda (Jazz) has waiting period of 2 months, Hyundai (Creta) waiting period between 2-4months and MSIL (S-Cross) would drive demand in the compact-SUV and premium hatchback segments. Also, upcoming new launches M&M (TUV300), Renault (Kwid) would help maintain positive momentum for PV sales. 4W inventory levels are at ~4 weeks for most companies.In 2Ws, domestic demand momentum is likely to remain subdued on deficient monsoon for most part of August. This would have particularly affected entry-level motorcycles. Motorcycle inventory for HMCL and HMSI is at 4-6 weeks.In the urban regions, demand momentum remains strong for scooters, partly insulating most 2W players from the slowdown in rural demand. For BJAUT, its newlylaunched Pulsar series is seeing good response, with waiting period of one month. For most of BJAUT dealer’s inventory is steady at 1 month.Improving utilization and lower input costs have helped fleet operators to improve their profitability. M&HCVs would continue to see recovery on the low base of last year, driven by replacement demand. In last one year most of the dealers have seen their workshop revenues to have gone up by 30%-40%. While LCV demand remains under pressure, the pace of decline has slowed down considerably. We expect LCVs to witness recovery during 2HFY16."Our top picks are Maruti Suzuki India (MSIL), Bajaj Auto and Tata Motors among large caps, and TVS Motor Company, EIM and Ashok Leyland among midcaps", says Motilal Oswal research.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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