It is the sector which has led the rally which the market has witnessed in the last 14 months and rightly so. If one looks at the history, the rallies which are led by the transportation and auto sector are more durable as sales of LCV and certain other auto segments is an indication of the economic situation on the ground. But there is another fact, which is that with a mad rush for stocks a number of them have seen sharp run with valuations moving upward sharply. There is no doubt that the Indian auto sector is going through a transformation and Indian companies are adjusting to it very well. So there is a situation, while the fundamentals are good and improving, valuations have seen a run up. So, there is a likelihood that we might see some cooling off, but that would bring an opportunity for investors who have missed the bus.
