Financial Daily from THE HINDU group of publications
Monday, Dec 22, 2003
Financial Daily from THE HINDU group of publications Monday, Dec 22, 2003 |
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Markets
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Stock Markets Auto stocks in top gear in 2003 Neha Kaushik
New Delhi , Dec. 21 THE enthusiasm seen in the automotive sector in 2003 has translated into a bumper year for auto stocks. Boosted by growth, both in the export and domestic sector, share prices of major automotive stocks have registered over a 100-per cent growth since the beginning of the year. Two-wheeler maker Bajaj Auto, for instance, has seen its stock price appreciate from Rs 508.55 on January 1, 2003 to Rs 1097.05 on December 19 on the Bombay Stock Exchange (BSE). According to market watchers, factors that have contributed to the appreciation of the Bajaj stock include, stable sales despite tough market conditions, expectation of higher sales due to a monsoon-led recovery in the agriculture sector and reports of aggressive export initiatives. Meanwhile, buoyed by healthy domestic commercial vehicle/car sales and global tie-ups, auto major Tata Motors has seen its stock soar from Rs 162.50 in the beginning of the year to Rs 434.95 as per Friday's closing price on the BSE. The momentum is all the more apparent in the auto ancillaries sector, which has been boosted by reports of increased outsourcing of components from India by global auto majors. According to the Automotive Component Manufacturers Association (ACMA), the exports of auto components are likely to touch $ 1 billion by March 2004 and about $ 2.5 billion by 2010. Auto component companies have seen their stock prices soar in the current year include Bharat Forge, which has seen its stock price more than triple since the beginning of the year from Rs 210.25 to Rs 784.10 on December 19 on the BSE. Similarly, the stock price of Sona Koyo Steering Systems has accelerated from Rs 55.70 to Rs 226.10. The automotive segment has also seen an increased interest by foreign institutional investors (FII) in recent months. The FII shareholding in Mahindra & Mahindra, for instance, has increased from 7.36 per cent on March 31 to 17.23 per cent on September 30. Similarly, in Bajaj Auto, the FII shareholding has moved up from 12.42 per cent to 17.33 per cent in the period.
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