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The IUP Journal of Management Research

Equity Analysis of Selected Indian Automobile Companies

Article Details

Pub. Date	: Oct, 2023
Product Name	: The IUP Journal of Management Research
Product Type	: Article
Product Code	: IJMR021023
Author Name	: Subbalakshmi M
Availability	: YES
Subject/Domain	: Arts & Humanities
Download Format	: PDF Format
No. of Pages	: 16

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Abstract

India's automobile sector is one of the world's strongest and most rapidly developing sectors. India surpassed Germany and Japan to become the thirdlargest vehicle market globally as of 2022. In India, the automobile industry is valued at over $100 bn, accounts for 8% of the nation's total exports, and generates 2.3% to GDP. Although considered risky, the equity market is regarded as one of the most lucrative options for investment purposes. Investors must do a common stock analysis and comprehend the attributes associated with risks and returns of equity share valuations and sectors in which they choose to invest. This study examines the valuation of equity shares of automobile companies listed on the National Stock Exchange in India. The study will be of use to prospective investors in making well-informed and logical investment decisions.

Introduction

All the investors invest surplus money to earn profit and increase their wealth (Croushore, 2006). Most investors make poor investment decisions based on biases such as overconfidence, regret, attention deficits, and trend-chasing (Aarzoo, 2019). Information availability, speed, news, and rumors all play a significant role in the stock market (Gopalakrishnan and Akarsh, 2017). The three main theories of investing are risk propensity, risk preference, and attitude (Deepak et al., 2021). Investing in the stock market increases wealth but also involves high risk because of uncertainty. To mitigate the risk, investors need to do an equity analysis (Panayiotis et al., 2014). In this regard, as one of the industries with the greatest growth rates in both established and emerging nations, investing in automotive business is one of the most attractive opportunities (Pavithra and Hamsalakshmi, 2022). India surpassed Germany and Japan to become the third-largest vehicle market globally as of 2022 (www.ETAuto.com). Due to the attractive equities of Indian automobile companies traded on the BSE, it has grown to be one of the top sectors in the stock market.