Don't think it's the right time to buy automobile stocks, says UBS Securities’ Gautam Chhaochharia

Stock price correction in the automobile sector is in-line with the earnings per share (EPS) decline, said Gautam Chhaochharia, head of India Research at UBS Securities, adding that he doesn't think it's right time yet to buy auto stocks.

“We still remain underweight... there is some more room left for it to play out and still early days for commercial vehicle cycles to bottom out. Therefore, we won’t jump into the sector," he said in an interview with CNBC-TV18.

The bigger issue with broader markets is the slowdown in growth, said Chhaochharia.

“Specifically the last couple of month - slowdown is a lot bigger worry for market and investors because there was hope building up that post-elections we will see growth picking up,” he said.

Speaking about sectors in favour of investors, Chhaochharia said, “We still see risk-reward being attractive in terms of valuation and earnings momentum. We still see risk-reward attractive in broader oil and gas space, specifically in gas but even in terms of oil marketing companies. We see risk-reward attractive even now in the listed property companies and we see risk-reward attractive in the insurance companies.”

“Where we do not see risk-reward being attractive even now is autos, non-bank financials and midcaps,” he further added.