The Nifty Auto Index is designed to reflect the behavior and performance of the Automobiles sector which includes manufacturers of cars & motorcycles, heavy vehicles, auto ancillaries, tyres, etc. The Nifty Auto Index comprises of 15 stocks that are listed on the National Stock Exchange.
In the table below you will find important data on Nifty Auto Companies Share prices, 52-week High and Low, PE ratio etc. Look for Green and Orange companies for investing. Bookmark this page for your easy reference in future.
The 10-year average growth rate of the Indian auto sector is ~7-11% depending upon the type of vehicle. Two-wheelers are close to 35% penetrated while passenger vehicles are underpenetrated with just 10% of potential customers. This indicates that the auto sector can provide good growth over the next decade.
The current annual run rate of two-wheelers is 2 Cr in volumes, passenger vehicles clock ~30 lakhs while commercial vehicles and tractors are ~7 lakhs each.
Due to its ticket size, barring 2-wheelers, the rest of the auto sector is very sensitive to change in the overall economic outlook and interest rates. Consumer sentiment plays a key role in the high-cost purchase. Also, the outlook for autos used for commercial purpose depends on general economic activity and future trajectory.
The auto ancillaries are the other part of the ecosystem that are suppliers to these OEMs. There are multiple auto ancillaries manufacturing Tyres, engines, fasteners, forging companies, crankshafts, batteries, etc. Some of the listed auto ancillaries are Motherson Sumi, Sundram Fasteners, Gabriel India, Exide Industries, MRF, etc.
Eicher Motors is into premium two-wheelers Royal Enfield and Commercial Vehicles and buses. Eicher Motors rebranded the iconic brand Bullet and built a culture of cruiser bikes in India. The company has more than 50% market share in the luxury bike segment. Future growth will come from geographical expansion, spares, and bike upgrades. Commercial vehicles and buses are more cyclical and contribute lower to overall business value.
Maruti Suzuki enjoys market leadership across segments namely PV, UV, and Vans with more than 50% market share. Early mover advantage and wide distribution have helped the company to achieve a large volume in comparison to peers. Large volumes, in turn, have helped the company to maintain a low cost of production versus peers, its primary source of the moat. Lower cost of ownership for the aspirational population ensures the company retains a large market share.
Bajaj Auto is the second largest two-wheeler manufacturer and the largest three-wheeler manufacturer in India, with exports to more than 70 countries. The company enjoys a market share of 16% in the domestic motorcycle market and more than 58% in the three-wheeler market. Motorcycles contribute around 84% and three-wheelers contribute around 16% to its total volumes. Strong marketing strategy in premium motorcycle and scale in three-wheeler has helped the company to enjoy high margins and ROE.
Invest with a margin of safety: Since it is a highly cyclical industry, investors should look at purchasing stocks with a decent margin of safety, to protect them from the downside.
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