A deep dive into the valuations of auto stocks

Passenger vehicle space is much more expensive compared to the two-wheeler space perhaps because the retail trends have indicated that passenger vehicle demand has been very strong up until now.

Society of Indian Automobile Manufacturers (SIAM) data indicate that there is a 13 percent growth in two-wheeler sales in November and overall two-wheelers and passenger vehicle has almost grown 10 percent.

However, the important point is whether the demand sustains going forward and there is enough growth to justify these valuations.