Domestic mutual funds are currently auto (Auto) Are looking bullish in the mobile sector. He expects the sector to recover after a three-year recession. Motilal Oswal Financial Services (mutual fundsEquity mutual fund holdings in automobile stocks rose to a 39-month high of 7.1 per cent in May, according to the report. Apart from this, May has been the second month in a row in which mutual funds have been buying auto stocks. Let me tell you that for the first three consecutive months, mutual funds reduced their position in this sector.
The change in sentiment in the auto sector comes after a three-year slump. The recession before the Covid epidemic and the difficulties of the Covid era created many problems for the auto sector in 2021. As a result, investors turned to the auto sector. But recently the outlook for the automobile sector has improved sentiment. Analysts believe that the bad phase of the auto sector has passed. With the improvement in rural demand and removal of supply constraints, the sector will now see a rebound.
Axis Securities said in a recent note that it is booming in the automobile sector. Demand in this sector is expected to increase in the near future. The sector will benefit from the new launch in the passenger vehicle segment. Apart from this, sales of commercial vehicles will also increase in 2022-23 due to the boom in the industrial and construction sectors.
The rural economy is showing very good signs at the moment, Spark Capital said in a note. The kharif crop is likely to be a bumper. But if the Ravi crop weakens, it could have an impact on demand in the auto sector. Edelweiss Securities, on the other hand, believes that high inflation rates, rising interest rates, inequality in post-epidemic recovery are some of the factors that could have a negative impact on any increase in the volume of the auto sector. In addition, the lack of semiconductors will be a major challenge for the local automobile industry. Experts believe that this challenge could have an impact by 2024.
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