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While the global indices were crashing down and several blue-chip stocks were hitting fresh lows, age-old Hindustan Motors was reporting impressive growth as it ended its bull run today.
Hindustan Motors is India's first and oldest automobile manufacturer, having been established in the pre-independence era in Gujarat. The company shifted its operations to Uttarpara, West Bengal in 1948 where it began the production of the classic Ambassador. A railway station named Hind Motors was established next to Uttarpara by the government. Even today, the Ambassador can be seen ferrying people all across India.
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The stock of Hindustan Motors was not seeing much movement as it fell out of investors' radar. However, the news that the iconic Ambassador, which had been in production for 56 years, could return as an electric vehicle seemed to bring the stock back into the limelight.
It was reported that the company was looking to enter into a partnership with a European EV manufacturer for production. It is said that both companies are working on a new design and engine for "Amby" which could be launched in 2024.
The company had the lion's share of the Indian automobile market in the 1970s when the Ambassador was the best car to buy and was considered a status symbol by many. However, with the arrival of cheaper models like the classic Maruti Suzuki 800 and others, the company began facing steep competition. By 2014, the company halted the production of Ambassadors due to a sharp decline in sales and piling debt.
The possible return of the once automobile giant tempted the investors to buy in early as the stock began jumping. On 24th May 2022, the stock closed at Rs 10.80 per share. In the next 15 trading sessions, the stock would hit the upper circuits consecutively as it grew 5-10% daily.
On 14th June 2022, the stock closed at Rs 24.25 per share, registering a growth of 124.5% in half a month!
Yesterday, the share saw a gap up opening as it opened at Rs 26.75 per share but it faced great selling pressure as it fell 4.9% to close at Rs 24.25 per share as it witnessed an overwhelming volume of 32.83 million!! Today, the share opened even lower as it declined 4.95% in early trading hours as it currently trades around Rs 23.05 per share.
Article by Aman Agarwal.
This news piece is brought to you in association with jobaaj.com
