Prefer M&M, Maruti Suzuki, Eicher in OEMs; Bharat Forge in auto components segment: CLSA

CLSA prefers M&M followed by Maruti Suzuki/Eicher Motors in original equipment manufacturer, and Bharat Forge in auto components segment.

Industry seeing decent demand trends in most segments should sustain in FY19, it believes.

The research house said fading low base will impact YoY growth rates in the year.

It expects passenger vehicle and medium & heavy commercial vehicle segments to post a healthy 10 percent volume CAGR in FY19-20. It also expects 2-wheelers to post moderate to 7 percent CAGR in FY19-20.

CLSA believes the competition should remain high in 2-wheelers & trucks but it is easing in passenger vehicles.

Higher input prices & regulatory changes will pose margin headwinds, it feels. It prefers stocks benefitting from cyclical recovery or having solid franchise.