Hero MotoCorp, Eicher Motors & other two-wheeler stocks tumble up to 6% despite healthy October sales

Stock Market Today: Shares of two-wheeler (2W) manufacturers, including Bajaj Auto, TVS Motor, Hero MotoCorp, and others, experienced notable selling pressure in the trading session on Monday, November 4. This downturn comes despite the companies reporting robust volume growth for October.

Investors appear cautious as broader global factors weigh on sentiment, including uncertainty surrounding the upcoming U.S. presidential election and the U.S. Federal Reserve meeting scheduled for November 7. Additionally, weak earnings reported by Indian companies for the second quarter so far alongside a sharp rise in crude oil prices fueled significant selling in today’s session, reflecting heightened unease in the market.

Bajaj Auto's stock crashed 5%, hitting an intraday low of ₹9,372 per share, while TVS Motor shares slumped by 4% to ₹2,412 apiece. Similarly, Hero MotoCorp and Eicher Motors also faced declines, tumbling by 6% and 3%, respectively.

The monthly sales volume released by the two-wheeler manufacturers, which accounts for a majority of their revenue from domestic sales, showed a healthy improvement in October. Hero MotoCorp reported an 18% year-on-year (YoY) jump in domestic sales, reaching 679,091 units in October. This surge was driven by robust demand from key urban and rural areas, particularly in the 100cc and 125cc segments during the festive period.

Additionally, Hero MotoCorp's exports rose to 21,688 units last month, compared to 15,164 units in the same period last year. TVS Motor also registered strong performance, with two-wheeler sales increasing by 14%, rising from 420,610 units in October 2023 to 478,159 units in October 2024. Notably, electric vehicle (EV) sales for TVS saw a significant growth of 45%, climbing from 20,153 units in October 2023 to 29,308 units in October 2024, as per the company's sales filing. 

Furthermore, the two-wheeler exports overall registered a growth of 16%, with sales increasing from 75,653 units in October 2023 to 87,670 units in October 2024. Eicher Motors reported a remarkable 31% rise in total sales of its Royal Enfield motorcycles, totalling 110,574 units in October. Sales of models with engine capacities up to 350 cc rose 27% to 96,837 units compared to 76,075 units in October last year.

In terms of international business, Eicher's sales were at 8,688 units last month, a significant increase from 3,477 units in October of the previous year. Meanwhile, Bajaj Auto reported a modest 2% improvement in 2W sales, with 414,372 units sold, up from 408,144 two-wheelers sold in the same month last year. It exports, however, surged by 22% YoY at 1,58,462 units.

Overall, 2W sales did well in October as compared to other segments. 

October Sales Meet Estimates

"Wholesale dispatches for Eicher Motors (above estimate) grew 31% YoY to 110.6k units (the highest ever wholesales in the history of the brand), while Hero MotoCorp and TVS Motor (both in line) grew 18% and 14% YoY to 679.1k and 478.2k units, respectively. Hero MotoCorp indicated strong double-digit retail growth on the Dhanteras day," said domestic brokerage firm Motilal Oswal.

While the two-wheeler (2W) segment has outperformed passenger vehicles (PVs) thus far in the fiscal year 2025, the brokerage anticipates that growth in this sector to moderate for the remainder of the fiscal. Maruti Suzuki is its top pick among auto OEMs, as it believes the company remains well-positioned to capitalise on rural recovery trends, bolstered by attractive valuations.

It also favours Mahindra and Mahindra, given its healthy demand momentum in both SUVs and tractors for FY25. It also likes Hyundai, as it appears well aligned to benefit from the industry trends towards UVs.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.