Kotak Securities bullish on Ashok Leyland, Mahindra & Mahindra
Goel expects the first quarter results for auto firms to be strong except for Tata Motors because of JLR issues.
Hitesh Goel, senior analyst at Kotak Institutional Equities spoke to CNBC-TV18 about the earnings outlook for the auto sector.
Goel expects the first quarter results for auto firms to be strong except for Tata Motors because of JLR issues.
The brokerage is very bullish on Ashok Leyland and Mahindra & Mahindra for their first-quarter results and expect them to do well in commercial vehicle and tractor sales.
"Tractor sales are expected to be good on back of strong rural growth", said Goel.
With regards to Tata Motors, the JLR volumes have been weak in Q1FY19 on back of uncertainty in Europe, China implementing input duty cuts in July, so margins could be weak for the quarter. The trade war and Brexit could also impact the stock, said Goel.
However, the Tata Motors stock is cheap and if they deliver what they are saying in terms of single digit growth in JLR and 4-6 percent EBIT margin growth then the stock could rally but that is still some time for that but near-term it looks weak, said Goel.
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