Don't invest in 4 wheelers stks: G Shah

Gaurang Shah of Geojit Financial Services advises not to invest in any of the four wheeler companies.

Shah told CNBC-TV18, "Not only Tata Motors the entire pack amongst the four wheelers whether it is Mahindra & Mahindra or Tata Motors or Maruti Suzuki, I think we are going to see a sluggish kind of quarters at least for the coming three-four quarters and our guess is that the slowdown in the vehicle will possibly increase in Q3. You might see some kind of sanity returning in Q4 but beyond that it’s going to be very sluggish in consolidation."

He further added, "The slowing down of the economy itself is going to be a cause of concern because a common man is not going to look forward to go ahead and buy a car. I think basic necessities would be the one that he would address and by the virtue of that you might see the offtake of month on month numbers slowing down and that would possibly reflect on the negative side on the topline and on the bottomline and no doubt that generating finances or creating finances for their projects would be difficult. But I think it would be on a slower pace and as some of the reports rightly pointed out that four wheelers companies have slowed down their projects and expansion capacities going forward. "

"So I would guess Rs 435 or even Rs 400 or even Rs 375 would take a very long time for it to possibly come to those kinds of levels but anything in excess of Rs 225 would reduce some part of the loss. But I would recommend that unless you have three-four years kind of timeframe, I do not think it would be advisable to get invested into any of the four wheeler companies."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol