Automobile

Should you place a contrarian bet on auto stocks? Both winners and losers hold the clue.

By Eduardo Saverin

Synopsis

In 2021, Nifty 50 has risen 24% while Nifty Auto index has underperformed with a 9% gain. On an average, stock prices of automakers, part makers, and tyre makers have fallen 24%-26% from their all-time highs. So, what should one do? What are the factors that one should weigh before investing in auto stocks?

Still in the woods.Amid some flicker of hope, these four words can convincingly sum up the current health of the Indian auto industry. Automobile sales declined 11% year-on-year in August as semiconductor shortage hit production. Domestic sales of Maruti Suzuki, the market leader in passenger vehicles, declined 9% to 103,187 units, compared with 113,033 units in August 2020. The story is no different on the bourses. In 2021, the Nifty Auto index

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Eduardo Saverin