Nifty Auto
Auto Industry has been a cyclical industry, therefore, we should invest at bottom of cycle and exit at the top.
Current charts of the Auto Index are showing that the bottom is already formed & every major dip should be bought.
Short Term trend: Bearish
Long Term Trend: Bullish as long as the 6700 levels are held.
Accumulation area 7200-7400.
Post-COVID Crash Performance of Major Auto Stocks
Top Performers: Mahindra & Mahindra, AshokLey, HeroMoto Corp
Worst Performers: TVS Motors, Bajaj Auto, Eicher
Out of the top performers, HeroMoto corp is a debt-free company and a major 2 wheeler manufacturer in India.
M&M & Ashokley have also performed well but they have significant debt on their balance sheets.
1 Year Performance of Major Auto Stocks
Top Performers: Eicher Motors, M&M, HeroMoto Corp
Worst Performers: Maruti Suzuki, Bajaj Auto, AshokLey
Eicher Motor has emerged Top performer in the last 1 year and after the stock split, the stock has been looking attractive.
HeroMoto corp continues to be lead the space in the last 1-year return.
HeroMoto Corp
HeroMoto corp has been in a continuous uptrend since March 2020 crash.
A level of 2500 is major support for HeroMoto, therefore, every major dip towards it should be bought. It had made time high near 4000 in 2017.
Going forward we can expect the same trend to continue. One can keep SL below 2500 for long term investment.
Below is fundamental information about the company.
Stock Trade at a moderate P/E level of 24 and we can easily see earning to improve in the coming quarters.
Monthly Sales numbers are already coming above the Pre-COVID environment. Therefore we can expect a decent expansion of P/E multiple as well.
Mahindra & Mahindra
M&M has delivered a very strong recovery as the Market recovered post-COVID crash.
Important Support 500
Current Trend: Mildly bearish
Important Resistance 650-670
Accumulation area: 540-560
Fundamental Information about M&M
M&M has posted a loss in the last quarter therefore P/E multiple does not hold much value. As pointed out earlier, M&M has heavy debt on its books which is eating up the profitability of the company. Therefore One should keep that risk factor for consideration before making any investment.
Currently for investment purposes in M&M can be bouget near 550 with an SL of 450.
