1. DIYTechnicalAnalysis is a private community of traders and investors interested in building wealth from Indian equity market. You can become a member with a one time registration fee of ₹199. Click here to become a member

Auto ancillary company stocks versus auto company stocks

Discussion in 'Technical Analysis' started by avrajq, Jul 16, 2018.

  1. avrajq

    avrajq Member

    Joined:
    Apr 8, 2018
    Messages:
    12
    Likes Received:
    12
    Why are major auto ancillary companies stocks falling so much, considering that auto companies stocks are themselves rising? e.g Bharat Forge, Cummins vs M&M, Maruti.
     
    avrajq, Jul 16, 2018
    Share #1
  2. shabbir

    shabbir Administrator Staff Member

    Joined:
    Apr 30, 2012
    Messages:
    6,702
    Likes Received:
    1,940
    I see it more of a technical correction because they have run up too much. As an example WABCO India which is an auto ancillary was trading at a PE multiple much higher than 50. Has corrected 20 odd percent now and still trades at around 45 PE.
     
    shabbir, Jul 21, 2018
    Share #2