Pratik Gupta`s view on auto space

Pratik Gupta, Head of Equities at Deutsche Equities shares his view on auto space. He also says there are issues like demand, currency and now one has this fear about the petrol and diesel disparity assuming the diesel price hike is not substantial enough.

Gupta told CNBC-TV18, “There is definitely some concern out there that the government will perhaps not be able to push through a fairly meaningful diesel price hike so that is one reason, the disparity between petrol and diesel but I think for the auto companies there is also a fundamental issue in terms of the demand environment, we are expecting a fairly sharp slowdown in terms of volume growth for the auto sales here in India.”
He further added, “The rupee weakness also plays the factor for a lot of these companies, impacts different companies in different way, some of them are heavily export oriented so they might benefit. On the other hand, you have companies which for example have exposure to the Yen and the rupee-yen has moved adversely for them so that also is another factor but in general we would not be very optimistic on the outlook for the auto sector but selectively, there are couple of companies, which might look alright but overall there is an issue with demand, there is an issue with the currency and now you have this fear about the petrol and diesel disparity assuming the diesel price hike is not substantial enough.”