Tata Motors, Ashok Leyland and Bajaj Auto get a 'steel' upgrade
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Update time : 2022-05-25 21:40:30
CLSA has upgraded shares of Tata Motors NSE -2.06 %, Ashok Leyland NSE -1.52 % and Bajaj Auto NSE 0.22 % as these companies are likely to benefit from a decline in steel prices. The rating on Baja Auto and Ashok Leyland has been raised to buy' from outperform, while the brokerage has upgraded Tata Motors to 'outperform' from 'underperform'. The government over the weekend announced a slew of measures to rein in inflation including duty cuts on petroleum products and a rejig of import duties on steel products and plastic. The resultant decline in steel prices would be positive for automakers which have been facing high input cost pressures over the last one year. Metal cost per vehicle for most original equipment manufacturers has almost doubled since the first quarter of
financial year 2020-21 on account of rising commodity prices but are likely to decline going forward on lower steel and aluminum price expectations.
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