Auto stocks outperformed the benchmark index in 2022 and analysts expect it to continue to deliver strong numbers in 2023, as well, on good volume growth and margin expansion.
The Street does not seem to be expecting Budget 2023 to be momentous for the sector, especially for fuel vehicles, but it will be closely tracking announcements aimed at driving electric-vehicle adoption. It will also be on the lookout for announcements that leave more money in the hands of the consumer, especially the rural consumer, to boost demand across auto categories.
Optimism around the sector seems to be driven by the demand outlook. The Street expects strong demand growth across categories, thanks to the low-base effect, product launches and an improving economy.