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Below is quote on Auto sector by Vinod Nair, Head of Research at Geojit Financial Services

"The industry is yet to come out of the woods as the  September auto numbers reflect a mixed bag. The domestic Passenger vehicle (PV) got the major hit with an average -37% YoY (-28% MoM) decline due to chip shortage and demand and supply widens. While 2/3- Wheeler OEMs witnessed a sequential growth of an average 13%, indicating a gradual recovery in the economy. The Commercial Vehicle (CV) is the worst hit and was reeling under pressure owing to covid fear of using public transport, economic uncertainty and change in the axle load norms. However, the sector is improving on a YoY basis with a 5% average  growth (11% MoM) supported by recovery in fleet utilization levels, higher number of road construction projects and e-commerce activity.  We  remain optimistic as the Festival will immediately revive the auto Industry  and push the pend-up and core demand as the economy opens with a fall in the third wave risk. Normal monsoon and encouraging farm activity are likely to contribute to positive consumer sentiments. Price hikes undertaken will take care of material cost and boost financial status. However, semiconductor issue & supply constraints will continue to loom in the medium-term. Our three top picks are M&M, Motherson sumi and Wabco"

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