Saturday, May 14, 2011

Petrol price hike to impact auto stocks

Steep hike in Petrol prices, to the extent of more than Rs 5 per litre, is definitely going to impact the auto sector growth going forward. The four wheeler segment is expected to feel the maximum brunt in terms of volume growth.

Higher interest cost and rising raw material prices have already been playing spoil sport on the growth and profitability of auto companies and now this steep hike in petrol price has added salt to the wounds of the auto sector.

Stocks of Maruti Suzuki & Tata motors are expected to be under lot of pressure when the markets open on Monday. Fresh investment in this sector should be avoided at this point of time.

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