Budget 2024 : Hero MotoCorp, Eicher Motors, TVS Motor Company, Bajaj Auto share price rose up to 1-3%. Hero MotoCorp led the gains and was among highest gainers in Nifty-50 stocks. The Rural two wheeler demand is likely to get support with budget announcements directed at the rural growth. The rural demand is significantly important for growth of two wheeler volumes.
Hero MotoCorp having the larger entry level portfolio of two wheelers remains the key beneficiary.
The Two-wheeler industry is already expected to sustain a steady volume growth rate. CareEdge Ratings had pegged two-wheeler of around 7-9% in FY25 on a high base, FY2024 had seen strong growth of 9.8% already.
The growth in FY25 is also expected to be driven by higher Electric Vehicle (EV) sales supported by Electric Mobility Promotion Scheme 2024. The expected interest rate cuts in second half of FY25, strong demand for new model launches, recovery in exports from its low base of FY24, and favorable monsoon which is likely to improve rural consumer sentiment and income levels as per CareEdge.
Other analysts also have remained positive as even Arun Agarwal, VP-Fundamental Research, Kotak Securities had said that domestic two-wheeler industry volumes is expected to witness 7-8% CAGR over FY24-27.
Notably the combined two wheeler volumes of companies under Motilal Oswal Financial Services already had growth 11% year-on-year Q1F25. The growth of two wheeler had been been significantly higher than seen by commercial Vehicles, Passenger vehicles and others.
In the meanwhile the income tax relief to lower middle cast and others is also positive for the entry level two-wheeler segment growth said analysts.
The Markets however corrected with news on lrise in the long an short term capital gains tax. With Nifty-50 index and Sensex correcting more than 1% even Hero MotoCorp, Eicher Motors, TVS Motor Company, Bajaj Auto share prices also gave up large part of the gains.
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