Driving Towards Success: Why we are Overweight Auto, in our Sector Advantage
Driving Towards Success: Why we are Overweight Auto, in our Sector Advantage
Driving Towards Success: Why we are Overweight Auto, in our Sector Advantage
Our portfolio is currently overweight in Auto stocks, yes the one that uses AI/ ML to over weight sectors based on economics and momentum.
Since our latest rebalance, these companies have seen a significant increase in value, ranging anywhere from 5% to 10%. In this blog post, we will discuss why we believe this trend will continue and why we are optimistic about the future of the auto industry in India.
Our Portfolio
Our portfolio is overweight auto stocks because we believe that this sector has a lot of potential for growth. We have invested in a variety of auto companies, including:
Balkrishna Industries Limited (BALKRISIND): A leading manufacturer of tires for a wide range of vehicles, including trucks, buses, tractors, and off-road vehicles. The company has a strong presence in India and other key global markets, and is known for its high-quality products and innovative technology. In recent years, BALKRISIND has been expanding its operations in key growth markets such as the US and Europe, which has helped to fuel its growth and profitability.
Elgi Equipments Limited (ELGIEQUIP): A leading manufacturer of air compressors and other industrial equipment. The company has a strong track record of growth and profitability, and has been expanding its presence in key markets such as the US and Europe. ELGIEQUIP's innovative products and commitment to quality have helped it to build a strong reputation among its customers, which has helped to drive its success in recent years.
Schaeffler India Limited (SCHAEFFLER): A global automotive and industrial supplier that specializes in precision engineering and high-performance components. The company has a strong presence in India, and is well-positioned to benefit from the growing demand for electric vehicles and other advanced automotive technologies. SCHAEFFLER's innovative products and commitment to sustainability have helped it to build a strong reputation among customers and investors alike.
These companies have all been performing well, and they are well-positioned to benefit from the growth of the Indian auto market.
Factors contributing to India’s Auto growth story
India is currently the 5th largest economy in the world. However, despite its size and economic strength, India has one of the lowest auto penetration rates in the world, with only 27 cars per 1,000 people. This is significantly lower than other countries with similar economic power, such as China, which has a penetration rate of 162 cars per 1,000 people.
In recent years, India has seen major improvements in infrastructure, including the expansion of highways, the construction of new airports, and the development of new ports. This has made it easier for people to travel across the country, which has increased demand for cars. Additionally, the government has implemented policies to encourage the use of electric vehicles, which has created new opportunities for companies in the auto sector.
Another factor that supports our bullish view of the Indian auto industry is the country's GDP per capita. Despite its relatively low auto penetration rate, India has a GDP per capita of over $2,000, which is significantly higher than other countries with similar auto penetration rates. This means that as incomes continue to rise, more and more people will be able to afford cars, which will further drive demand for vehicles.