Hero MotoCorp, Ashok Leyland, TVS Motor hit 52-week high

Shares of automobiles companies are on a roll with Hero MotoCorp, Ashok Leyland and TVS Motor Company touching their respective 52-week highs on the BSE in intra-day today.

The S&P BSE Auto index ended up 1% at 17,731 as compared to 0.18% rise in the S&P BSE Sensex which ended at 25,330. Thus far in March, auto index rallied 12% against 10% gain in the benchmark index.

Among the individual stocks, TVS Motor Company rallied 4% to Rs 318, extending its previous day’s 6% rally on the BSE, on back of heavy volumes. The stock of two-three wheeler maker hit 52-week high and currently quoting nears to its lifetime high of Rs 322 touched on January 19, 2015. It outperformed the market by gaining 19% so far in the current month.

TVS Motors in last week had entered into a partnership with Snapdeal to sell the motorcycles and scooters online. The company had launched its new four strokes TVS XL 100 in Madhya Pradesh, Andhra Pradesh and Telangana during the current month.

Hero MotoCorp (HMCL) hit a 52-week high of Rs 2,899 on BSE in intra-day trade. The stock finally settled at Rs 2,887, rallied 15% thus far in March after the company clocked a double digit growth in two-wheeler sales in the month of February 2016.

Bucking the sluggish industry trend, HMCL sold 550,992 units of two-wheeler in February 2016, as compared to 484,769 units in the corresponding month last year, reflecting a robust double digit growth of 13.6%.

Ashok Leyland closed at Rs 103, after hitting a lifetime high of Rs 105 on the BSE in intra-day trade. Thus far in the current month, the stock rallied 19% from Rs 88 after the company reported a 25% YoY growth in total sales during the month of February 2016 at 13,403 units.

According to CRISIL Research, the focus on rural incomes and infrastructure development in Union Budget is structurally positive for the automobiles sector.

Higher spending on national highway projects will spur sales of construction trucks. Continued focus on rural development schemes will also indirectly aid sales of tractors and two-wheelers.

“In the near term, however, the infrastructure cess and additional luxury tax on passenger vehicles (excluding taxis) will drive up prices and reduce demand. Within passenger vehicles, demand for diesel vehicles, large sedans and SUVs will be relatively more impacted,” CRISIL said in a budget analysis.