Positive auto outlook; two-wheelers seen as strong investments

Sandip Sabharwal, an investment expert, shares his views on the current state of the auto sector and other markets. He believes that the outlook for the auto sector is positive, especially for two-wheeler vehicles, which he feels offer better value right now. Sabharwal mentions that Havells, a consumer durables company, is likely to benefit from various growth areas, including air conditioning. He warns that tariff changes in the U.S. and India might hurt consumers more than expected. He explains that tariffs tend to shift costs to consumers, leading to increased prices. In the construction sector, Sabharwal highlights NCC as a strong player, citing their efforts to reduce debt and focus on specific project types. He notes that many construction companies have struggled recently due to fluctuating government project allocations. However, he sees a potential rebound in the next year and advises against rushing to sell during dips in the market. He also discusses competition in the wire and cable industry, mentioning a recent influx of players, which could affect the market dynamics. Sabharwal believes that companies like Havells may be less impacted due to their diversification, while others may face valuation corrections. On the topic of investing in specific stocks, Sabharwal likes Manappuram, which received a significant investment from Bain Capital. He thinks this deal will help the company grow despite any past challenges. Finally, regarding auto stocks, Sabharwal suggests that upcoming clarity on tariff policies may not significantly affect Indian auto companies. He sees positive demand trends expected for next year, driven by tax breaks, lower interest rates, and improving rural sentiments. He remains optimistic about the long-term prospects for companies like Tata Motors and Mahindra & Mahindra.