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After 45% index fall, UBS does a u-turn, upgrades automakers

Mumbai: Foreign brokerage UBS has became certain on Indian automotive corporations after the 45 consistent with cent decline within the Nifty Auto index.

The brokerage has upgraded Hero MotoCorp, Bajaj Auto, Maruti Suzuki India and Bosch to ‘buy’ from ‘promote’ as it believes cast balance sheets and robust free money waft era of those companies will motive the marketplace to disregard nearterm disruptions, whilst FY21 earnings estimates usually are diminished sharply.

UBS believes the unfavourable affect of BS-VI norms and a doubtlessly sharp macro-economic slowdown in FY21 are doubtlessly priced in.

Ashok Leyland, Bajaj Auto and Maruti Suzuki India are UBS’ best selections within the auto sector.

However, the brokerage has slashed goal costs of lots of the auto stocks principally due to a lower in earnings estimates for FY22.

The brokerage has lower goal worth on Bajaj Auto to ₹2,750 from ₹2,900. UBS has retained its buy advice on Eicher Motors and lower goal worth to ₹19,000 from ₹23,000.

The brokerage has also lower goal more than one on Mahindra & Mahindra’s core trade to 8 times EV/ EBITDA on FY22 estimates and larger the cut price for the worth of listed subsidiaries given the drag from loss-making subsidiaries.

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