Auto sector stocks: PL Capital forecasts robust growth; Buy and Accumulate signal on these scrips
The Indian auto sector is moving into the fast lane. A report by brokerage firm PL Capital has expressed confidence in the overall sector, where it has flagged the tailwinds for a few firms. It has assigned a Buy and Accumulate for some of them.
Kolkata: Brokerage firm PL Capital has said that the Indian automobile sector is likely to witness continued growth this year. From rural demand to rising EV, increasing expenditure on infrastructure to GST benefits being passed on to the consumers and recovery in the commercial vehicle sector are all tailwinds for this crucial sector. In their report, PL Capital (earlier Prubhudas Lilladhar) has assigned 'Buy' and 'Accumulate' for a few stocks. Let's have a closer look at the target price of these scrips. The note from PL has mentioned that there is going to be a rise in both volume and market share in the EV segment.
Tata Motors Passenger Vehicle
Target Price: Rs 620
PL Capital maintains a positive outlook on Tata Motors. The stock is currently trading at about Rs 566. The brokerage assigned Accumulate rating and states that the company's EV portfolio is rapidly strengthening, and demand in the commercial vehicle segment is also improving. The increasing share of EVs could unlock value in the long term.
Mahindra & Mahindra (M&M)
Target Price: Rs 3,950
The stock's current market price is approximately Rs 3,801. The brokerage has given it an Accumulate rating. According to the report, M&M is witnessing strong growth in its domestic SUV sales, tractor segment, and commercial vehicle business. The CV segment, in particular, has shown early signs of a volume upcycle, which could support margins going forward.
Maruti Suzuki
Target Price: Rs 16,215
PL Capital adopted a slightly cautious in its stance on Maruti Suzuki. The stock's current market price (CMP) is Rs 16,970 and a Hold rating has been maintained. The brokerage has set a target price of Rs 16,215. According to the report, while domestic passenger vehicle sales have improved but weakness in the export segment remains a concern. Demand for small cars and utility vehicles is a support.
Hyundai Motor India
Target Price: Rs 3,050
Hyundai Motor India's share price is Rs 2,266. PL Capital has given a Hold rating. According to the report, growth in the domestic market has been limited, but the export business has shown good strength. New model launches in the coming period could support the company.
Bajaj Auto
Target Price: Rs 9,050
The brokerage has adopted a mixed view on Bajaj Auto. The stock is currently trading at Rs 9,499 and a Hold rating has been assigned. According to PL Capital, growth in the two-wheeler domestic segment is sluggish, but exports and the commercial vehicle business are supporting the company's earnings.
Hero MotoCorp
Target Price: Rs 6,555
The brokerage remains confident in Hero MotoCorp. The share's current market price (CMP) is approximately Rs 5,931 and it has been given an "Accumulate" rating. The brokerage states that a strong recovery is visible in both the motorcycle and scooter segments. The EV business of the company is gradually gaining momentum.
TVS Motor
Target Price: Rs 3,907
PL Capital is very bullish about TVS Motor. Its current share price is Rs 3,874.50. It has been given an "Accumulate" rating. According to the report, the company has registered strong volume growth across all segments – two-wheelers, scooters, motorcycles, and EVs.
Ashok Leyland
Target Price: Rs 210
PL Capital has a positive outlook on Ashok Leyland in the commercial vehicle space. The stock's market price is Rs 187.90 and it has been assigned an "Accumulate" rating. According to the report, strong demand persists in the medium and heavy commercial vehicle and bus segments, which could support both the company's revenue and margins.
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