Will Auto Stock

Outperform in 2019 ?
By Yogesh Supekar & DSIJ research team
 BACKGROUND
● Auto sectors have created huge amount of wealth for investors
● Historical Performance of Auto Stock
 BACKGROUND
● Historical Performance of Auto Stock
● Contribution-7% of India’s GDP and 22% of India’s
Manufacturing GDP
● India’s Sixth largest car market in the world
● Customer Centric - Innovative and Competitive Product
● Market Share of car manufacturing companies
Auto Stocks Performance
• Auto stocks are trading close to their respective 52 weeks
low
• Competitive nature of the industry is leading to margin
erosion of several auto makers & that is getting reflected in
their stock prices
• No clear trend for electric vehicles
 High cost of battery and overall price of EV
Lack of charging infrastructure
Lack of ancillary industry
 TRADING
• Close to their respective 52 weeks low

Company Name Bse 52 Week High Price Bse 52 Week Low Price Latest Price

Ashok Leyland 135.10 60.30 63.70

Bajaj Auto Ltd 3,145.55 2,400.00 2750.00

Eicher Motors Ltd 29,799.95 15,800.00 16589.85
Mahindra & Mahindra 992.00 502.85 527.60
Hindustan Motors Ltd 10.18 4.90 5.65
HMT Ltd 25.00 11.05 12.75
 Auto Stock Performance (%)
Company Market ROE(%) Dividend TTM PE 6 Months 1Year 3 Year 5 Year
Name Cap Yield (%)

Ashok 24.37 4.87 5.87 -19.63 -49.56 -26.54 83.43 

Leyland 18699.31

Bajaj 79580.27 22.80 2.18 14.69 -1.52 3.13 -4.58 28.85

Auto
Eicher 45273. 40.58 0.75 49.15
Motors -17.64 -42.37 -26.09 65.59
70
Mahindra 65,590.84 17.21 1.61 16.37 23.66
and -13.69 -32.43 -2.11
Mahindra

Hindusta 119.56 0.00 0.00 4.62 10.58

n Motors -13.53 -27.67 -24.34
Ltd

HMT Ltd 1,583.3 0.00 0.00 68.04

-25.87 -46.76 -66.58 -70.55
8
POSITIVES
● May benefit from lower
fuel price and metal price
● Budget boost for
automobile industry
● Pre-buying ahead of BS-VI
norms
● India has 25 cars per 1000
population, where there is
scope of improvement
NEGATIVES
● Delay in implementation of
BS-VI norms
● Exports expected less due
to trade wars
● Dip in consumption of cars
and two wheelers due to
tight liquidity
 OUTLOOK
● Auto Stocks – Bearish
● Past few quarters
○ Commercial Vehicle – Down by almost 30%
○ Passenger Vehicle and Motorcycle Sales – Dropped by
nearly 30 – 40 %
● Outperformance from a medium to short perspective
● Increase of product price due to BS-VI by 8-10%
● Diversified portfolio can be skewe
 THANK YOU

Vrushali Fiske(56)
Amruta Gavas(57)
Jasleen Ghai(58)
Mrunmayi Gharat(59)
Devi Gupta(60)