Synopsis
While they are all classified under the broad category of auto stocks, the operating matrix of each company is very different. For heavy commercial vehicle players the factors impacting the sales are very different from a two wheeler maker and a passenger car maker has a different matrix to deal with when it comes to raw material and sales. In the current economic cycle, it was HCV and LCV which were the first ones to see an uptick, just after the covid. In the last few days, there have been some reports which suggest that HCV and LCV sales have slowed. Is this an indication that some cool off around the corner. But if there is slow down then it is an opportunity because of structural transformation which is taking place in the industry.
If one looks at the history, the rallies which are led by the transportation and auto sector are more durable as sales of LCV and certain other auto segments is an indication of the economic situation on the ground. But there is another fact, which is that with a mad rush for stocks a number of them have seen sharp run with valuations moving upward sharply. There is no doubt that the Indian auto sector is going through a transformation and
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