M&M To Bajaj Auto: Stocks That Will Continue To See Growth, According To Analysts

A day before the release of auto sales data, Nifty Auto touched a new high of 22,576.85, with Mahindra and Mahindra Ltd. gaining the most. According to analysts, a handful of companies in the auto sector are good bets and will continue to see growth.

"It's more of handful of stocks that are participating in the rally in autos, and I believe it will continue to happen going ahead," said Aditya Agarwala, head of research and investments at Invest4edu Pvt.

While the top pick by analysts includes Mahindra and Mahindra—which touched a new life high on Tuesday at Rs 2,162.25 apiece—Agarwala said that commercial vehicle stocks also saw a maximum jump. Other auto picks include Eicher Motors Ltd., Ashok Leyland Ltd. and Bajaj Motors Ltd.

On Tuesday, the NSE Nifty 50 ended 45.60 points, or 0.20%, lower at 22,597.80, and the S&P BSE Sensex closed 188.50 points down, or 0.25%, at 74,482.78. Intraday, the Nifty rose 0.62% to a record high of 22,783.35 and the Sensex gained 0.59% to 75,111.39.

Apart from passenger vehicles, Mahindra's tractor segment also looks interesting, said Sudip Bandyopadhyay, group chairman of Inditrade Capital Ltd. With the good monsoon, the company will see more excitement in the coming months, he said.

Nifty Bank also hit a fresh life high, which, according to Agarwala, was a surprise rally. The index is close to 50,000 levels, which will be a new benchmark for it. The reason for the upward gain is that a lot of small banks are outperforming, he said.

Demand for power in India has increased significantly and this will push for finance in the sector. However, the valuation of power financing companies is a different question, as it has reached a level where he would prefer to pause, Bandyopadhyay said.