Stocks to Watch - Maruti & Infosys Share Prices

Both of them have had good returns recently but pundits are of the opinion that too much of dependence on them can lead to setbacks.

Maruti share prices saw their all time high when they declared an 80% increase in their annual profit. This came at the time when the Indian auto industry was facing its lowest phase. Quite naturally, most investors were attracted towards this well performing company and share prices showed a tremendous increase. However, note here that this was a sporadic rise and we should not be led into believing that the rally would maintain its sway. Trade pundits state a few reasons, why Maruti share prices might not retain their charm. The first reason is that a large part of the profits made by Maruti were due to the falling Yen, which made imports from Japan, less costly and led to good profits. This scenario won't however hold good for long and hence we can't expect the same profit margins in the time to come. Maruti's Ertiga was one of the major contributors to its good numbers in Sales. The fresh new vehicle came in as a wave and hence the profits made can also be called a windfall gain. Since, markets tire out easily with just one product, we can expect stagnation in Eritga sales too and hence predict not so huge profits in near future. With a good number of new entrants in the car arena, we can also foresee divided markets and a loss in share of market for Maruti. All these reasons, combined together might have a loss in Maruti share price in near future. Here, bears can see profits and plan to buy shares once they are really low. In the long run, the shares are promising and one can plan a long time investment in them.

Another stock that we are keeping a close watch on is Infosys. The country's second largest software outsourcer saw its worst slump and ever weakening Infosys share price. Unlike in past, this time the company did not even publish its guidance on shares, stating market unpredictability as the reason behind the same. Company also stated that they are under pressure due to cost cutting and delays from clients.

It is very likely that Infosys share price would go down soon. So if you have them already, plan an exit as soon as possible. However, we would not refute that the company in the long run is quite promising. So if you are bearish, wait for the shares to go to their lowest and then wait patiently for them to get back to their good form.