Money & Banking

Axis Mutual Fund picks battered Indian auto stocks

Bloomberg Mumbai | Updated on October 22, 2019 Published on October 22, 2019

The S&P BSE Auto Index has declined 14 per cent so far this year

Axis Mutual Fund is looking at one of India’s most beaten-down sectors -- the auto industry -- to help keep it in the top ranks of the nation’s asset managers.

The investor is slowly increasing exposure to select companies as it sees some signs of demand revival with a better-than-expected monsoon and lower corporate tax rates supporting sentiment.

“We are adding auto to our portfolio. In another two years, the sector could come back,” Jinesh Gopani, head of equity for Axis Asset Management Co, said in an interview on Friday. He is currently overseeing assets of about Rs 57,000 crore.

The S&P BSE Auto Index has declined 14 per cent so far this year. This is the second-worst performance among 19 sector sub-indexes compiled by BSE Ltd. Passenger car sales plunged 33 per cent in September from a year earlier, down for an 11th consecutive month, industry data showed earlier this month.

The fund, with assets of Rs 20,400 crore, added shares of India’s largest car manufacturer Maruti Suzuki India Ltd, Eicher Motors Ltd and auto component maker Motherson Sumi Systems Ltd, data showed.

“The idea is to pick leaders in large, mid and small caps from each sector and just be with them over their business cycle. We don’t want to be a rock star in one year and a pop star in another,” Gopani said.

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Published on October 22, 2019
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