The best auto stocks to buy as the shortage of semiconductors eases in July

The best auto stocks to buy as the shortage of semiconductors eases in July

Auto Sales July 2022:After what seemed like an endless slump, July saw encouraging improvements in India’s auto sector, a vital economic barometer, indicating that businesses have overcome the production barrier brought on by a shortage of semiconductors. However, business leaders cautioned that inflationary pressures on commodity prices and interest rate increases could hurt this development.

Major automakers like Mahindra & Mahindra, Tata Motors, Hyundai Motors, and Maruti Suzuki reported strong sales figures for July. Total car sales in July 2022 increased by 15.2% year over year to 3,24,650 units from 2,81,576 units sold in the same month in 2021.

The chief financial officer of Tata Motors Group, PB Balaji, stated last week that the issue of semiconductor scarcity is easing and he anticipates it to get better with each passing month.

According to experts, the figures point to an increasing trajectory that might gain momentum over the holiday shopping season, when automakers anticipate higher sales. The increase offers the car industry, which was sorely seeking a victory, some hope even in the face of worries about recession, persistent inflation, and other unforeseeable national and international events, they said.

“The July 2022 auto sales have been positive as the semiconductor shortage is easing out and the covid effects have receded,” said Punit Patni, equities research analyst at Swastika Investment Ltd. From a long-term view, we are optimistic about the industry; nevertheless, the recent dispute between China and Taiwan may cause semiconductor-related problems to resurface and hinder the industry’s revival. Additionally, the recent surge in auto stock prices prompts us to exercise caution in the near term.

Stocks To Buy

Following strong monthly vehicle sales figures in July, Prabhudas Lilladher Pvt Ltd’s head of advice, Vikram Kasat, suggests purchasing the following stocks:

Ashok Leyland

Target Price – Rs 177

Gains in market share are assisted by recent launches, and AL will continue to reclaim its lost position as the bus segment is revived and new models are introduced.

Mahindra & Mahindra

Target Price – Rs 1,400

records for Scorpio-N reservations, Value can be unlocked by the company’s proactive use of the EV trend and its back-to-back successful launches in the fiercely competitive SUV market, which have helped it make a healthy turnaround in its car segment.


Target Price – Rs 9,500

Additional model launches, performance improvement from 2QFY23, and the introduction of the New Brezza and Grand Vitara will result in increased volumes and improved margins due to the weaker yen and lower commodity prices.

In contrast, Patni stated: “Our long-term picks are Ashok Leyland Ltd., Mahindra & Mahindra Ltd., TVS Motor Company Ltd., and Tata Motors Ltd.”

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