Stock market experts believe that auto shares are surging after the news break of semiconductor shortage in India bottoming out from next quarter
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Stock market today: Amid news of semiconductor shortage in India bottoming out from next quarter, market analysts have become highly bullish on auto stocks. In fact, they asked market investors to look at today's rally in auto stocks from this angle and expected this sharp rise in auto counters to continue further. They advised stock market investors to buy quality auto stocks like Maruti Suzuki India Limited or MSIL, Mahindra & Mahindra (M&M), Motherson Sumi Systems and Hero MotoCorp that are available at discounted price after heavy selloff due to semiconductor shortage in 2021. They said that such good news after the PLI scheme approval by central government may work as ‘double engine growth’ for auto stocks in short to medium term.
On reasons for being so bullish on auto stocks; Ravi Singhal, Vice Chairman at GCL Securities said, "Auto stocks are rising today after the news break of semiconductor shortage in India bottoming out from next quarter. Since, auto stocks are quoting at discounted price after heavy beating in 2021, good news on semiconductor shortage front immediately after the PLI scheme approval by central government, is expected to work as double engine growth for auto stocks. One should take advantage of these developments and buy quality auto shares that are available at discounted price after heavy beating in 2021."
Asked about the auto stocks that one can buy today, Ravi Singhal of GCL Securities said, "One can buy Maruti Suzuki and Hero MotoCorp shares as both the stocks are available at discounted price despite strong fundamentals. These auto stocks have fallen due to the short-term negative sentiments like Covid-19 lockdown and semiconductor shortage reasons. So, one can buy Maruti Suzuki shares at ₹6845 levels for 2-month target of ₹7250 maintaining stop loss at ₹6720. Those who want to buy Hero MotoCorp shares can initiate momentum buy at current market price for 2 month target of ₹3000 maintaining stop loss at ₹2777 apiece."
Speaking on auto stocks to buy today; Sumeet Bagadia, Executive Director at Choice Broking said, "One can buy Mahindra & Mahindra (M&M) shares at current market price for immediate short-term target of ₹780 to ₹800 maintaining stop loss of ₹725. Likewise, one can buy Motherson Sumi shares at current market price for immediate target of ₹240 to ₹250. However, one must maintain stop loss at ₹210 while taking this position."
Nifty auto index today shot up around 0.70 per cent. Auto major Tata Motors share price surged around 2.50 per cent, Balkrishna Industries shares shot up 3.7 per cent, Mothersumi stocks rose near 2 per cent while shares of Mahindra & Mahindra Ltd or M&M and Maruti Suzuki added more than 1.50 per cent in early morning trade session.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.