Shares of auto companies zoom as festive season kicks in

Auto indices outperform key benchmark indices

With the country in festive mood, shares of India's auto companies are adding up to the festivities. They have zoomed in the past one month, with some of the auto counters galloping by almost 50%.

With recent actions on interest rates by banks and some lenders even waiving off the processing fees, passenger vehicles sales (which already have started showing some positive signs) are expected to remain reasonably better, if not robust.

The markets seem to have already priced in such moves and stocks have been moving upwards. At a time when benchmark key indices gained about 7%, auto indices outperformed with a gain of over 12%.

TVS Motors has emerged as the biggest gainer since 1 September as the counter is trading about 48% higher at Rs 45. Bajaj Auto shares climbed 15% and shares of Hero Motocorp remained more or less steady at a little above Rs 2,000 mark.

In the passenger vehicle space, Tata Motors has been the clear winner as the stock has gained about 17% to reach up to Rs 350. Maruti Suzuki, India's largest car seller, is not far behind with its shares up about 13% during the period.

Mahindra & Mahindra, which had abruptly fell to below Rs 800 level, also regained its strength and is now trading 10% higher at around Rs 860 a share.

One of the best monsoons in over a decade period has started showing its positive impact as far as outlook for auto companies is concerned.