PLI scheme will benefit in auto sector, these 8 stocks will run, what do you have

Market experts say that the auto sector will get the benefit of the PLI scheme of Rs 26,058 crore. In such a situation, there are 8 auto stocks on which investors would be advised to bet. Significantly, the Union Cabinet has approved the Production Linked Incentive (PLI) scheme for the automobile sector yesterday.

Union Minister Anurag Thakur said that the Government has approved Production Linked Incentive Scheme for Auto Industry, Auto-Components Industry and Drone Industry to enhance India’s manufacturing capabilities. A budget of Rs 26,058 crore has been fixed in this PLI scheme, of which Rs 25,938 crore is for the auto sector and Rs 120 crore for the drone industry.

The PLI scheme for the auto sector will be effective for five years from fiscal year 23 and the base year for the eligibility criteria will be 2019-20. A total of 10 automakers, 50 auto component makers and five new non-automotive investors will benefit from this scheme.

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Due to this news, there has been a strong rise in the shares of all auto and auto component companies. Nifty Auto index is currently showing a gain of 0.25 percent. On the other hand, it had seen a rise of about 0.90 percent yesterday. Tube Investments, Ashok Leyland, Tata Motors, Bharat Forge, Balkrishna Industries and Bajaj Auto had gained 1-3.6 per cent in yesterday’s trade.

VK Vijay Kumar of Geojit Financial Services says that yesterday’s announcements for the telecom and auto sector will act as a lifeblood for these sectors. With this, new investments will be seen in the auto sector. This is a bold step in the reform direction.

Rahul Sharma of Equity99 It also says that this PLI scheme brought for the auto and auto component industry can bring new investment of up to Rs 42,500 crore in this sector. Apart from this, around 7.5 new jobs will also be available.

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Santosh Meena of Swastika Investmart It is said that under this scheme, 22 auto components are covered. A total of 22 components, including flex fuel kits, hydrogen fuel cells, hybrid energy storage systems and parts of electric vehicles including charging ports, drive trains, electric vacuum pumps and electric compressors, will benefit from the Auto Components PLI scheme. Apart from this, a sunroof and electronic stability control have also been added to the component PLI scheme. Petrol and diesel engine components, exhaust, after treatment and FIE systems and ECU, automatic transmission assembly and electronic power steering system are also part of the scheme. However, the benefit of this scheme will now be available only to vehicles running on electric and hydrogen fuel, while petrol, diesel and CNG vehicle makers will not be covered under this scheme. Its focus will be on advanced automotive technology.

Santosh Meena says Stocks like Jamna Auto, Varroc Engineering, GNA Axles, Pricol, Sona BLW, Motherson Sumi and Minda Industries will benefit from this scheme. Another analyst Aparajita Saxena says that the scheme will benefit stocks like Motherson Sumi, Minda Industris and Lumax Industries.

from this perspective Top picks of Rahul Sharma from Equity99 These include M&M, Tata Motors & Hero MotoCorp.

Sanjeev Bhasin of IIFL Securities It is said that at present the auto sector is facing the problem of demand-supply of semiconductors. But this news related to PLI scheme is good news for the auto sector. From the perspective of 3 months, the auto sector is looking very good. Sanjeev Bhasin is bullish on Hero MotoCorp, Bharat Forge and Bosch.

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