Auto demand back to pre-Covid levels across segments: HDFC Securities

New Delhi, Oct 13 (IANS) Automobile demand has reached the pre-Covid levels across the sectors, including two-wheelers, passenger cars and tractor segments, HDFC Securities said in a report.According to the report ‘Autos & Transportations Q2FY21 Results Preview' prepared by the Institutional Research Desk at HDFC Securities, sales recovery is led by further opening of various regions (Unlock 5.0), sustained rural demand and inventory build-up ahead of the festive season."We expect an all-round improvement in margins in 2QFY21 driven by rising utilisation levels (production is now running at 65-90 per cent of capacity)," said Aditya Makharia, Institutional Research Analyst (auto), in the report."Correspondingly, valuation multiples for auto companies continue to re-rate and are now trading at levels between mean ‘P/E and +1std deviation'," Makharia added.As per the report, Nifty Auto index is up a further 20 per cent over the quarter versus 9 per cent for the broader Nifty."We believe that stock price returns will be driven by retail trends in the festive season as well as expectations of supportive government policy (GST reduction, scrappage scheme)."We have a BUY on Maruti, Hero and Endurance in the autos segment and prefer Gateway Distriparks in the logistics segment," Makharia said.-IANS
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