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Sensex Opens Flat, Tata Motors Up 1.5%
Wed, 4 Jan 09:30 am

Asian markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 0.27% while the Hang Seng is up 0.04%. The Nikkei 225 is up 2.2% as yen weakened against a stronger dollar. Over in the US, the Dow Jones Industrial Average and S&P 500 closed their previous sessions on a firm note.

Meanwhile, Indian share markets have opened the day on a flat note. BSE Sensex is trading higher by 32 points and NSE Nifty is trading higher by 17 points. Meanwhile, S&P BSE Mid Cap and S&P BSE Small Cap are trading higher by 0.4% respectively. The rupee is trading at 68.09 against the US$. Barring FMCG sector, all the sectoral indices are trading in green with consumer durables and metal stocks leading the gains.

According to an article in The Financial Express, Exide Industries Ltd announced that it will invest Rs 3 billion to expand its capacity for advanced motorcycle batteries over a period of 18 months starting April.

In this regard, Exide opened a Rs 7 billion assembly facility in Haldia to make so-called punched grid batteries with technology from East Penn Manufacturing Co. of the US. Exide is the first producer of such batteries in India. With the new facility, Exide has increased its annual production capacity by 1.2 million to 15 million batteries.

Reportedly, the new range of batteries will not only be a lot more robust, being manufactured in a modern plant with advanced robotics and automation (Subscription Required), the manufacturing process will also eliminate human errors to a large extent.

Speaking about the impact of demonetisation on the company's sales, Exide witnessed a 30% drop in its sales in two-wheeler OEM (original equipment manufacturer) segment in the month of December last year. Sales in replacement market, however, remained unimpeached so far.

Considering the stocks in auto-ancillary space, how should you go about picking stocks from this segment? Tanushree Banerjee, Co-head of research has penned an interesting piece in our recent edition of The 5 Minute Wrapup. She is of the opinion that, besides healthy balance sheet, good growth prospects, sound management, one must look out for technological expertise, market position and strength of the aftermarket (Subscription Required) while picking stocks from this industry.

Exide's share price began the trading day up by 0.1% on the BSE.

Moving on to news from stocks in automobile sector. According to a leading financial daily, Tata Motors' passenger and commercial vehicle total sales (including exports) in December 2016 stood at 40,944 vehicles, 2% growth over 39,973 vehicles sold in December 2015. The company's domestic sales of Tata commercial and passenger vehicles for December 2016 stood at 35,825 units, up by of 1%, over December 2015. Cumulative sales (including exports) of the company for the fiscal were at 3, 91,493 units, higher by 7% over 364,939 vehicles, sold last year.

In December 2016, the company's passenger vehicles, in the domestic market, recorded sales at 10,827 units, with a growth of 35%, over December 2015. The passenger car sales continued its growth momentum at 40%, due to strong demand for the Tata Tiago, with sales showing an increasing trend (Subscription Required).

The overall commercial vehicles sales in December 2016, in the domestic market were at 24,998 units, lower by 9% over December 2015. Market continues to remain under pressure due to the impact of demonetization, which was felt across segments, particularly in the long haul cargo segment.

S&P Auto Index Since Demonestisation

Passenger vehicles sales at India's top three automakers slipped in December despite an aggressive sales push to beat the year-end sluggishness and the impact of demonetisation of high-value banknotes. However, firms with a relatively smaller base and new models in their line-up saw sales advance at a brisk pace over the year-ago period.

Automobile stocks are trading on a positive note with TVS Motors and Escorts Ltd leading the gains.

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Jan 18, 2018 03:35 PM