InvestorQ : Why are all the two-wheeler companies in the market like Bajaj Auto, Hero Moto and TVS Motors hitting their high prices?
NISHA Nayak made post

Why are all the two-wheeler companies in the market like Bajaj Auto, Hero Moto and TVS Motors hitting their high prices?

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Priyanka N answered.
2 months ago
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It does look like the two-wheeler stocks are having their share of fun in the bull rally. IN fact, the shares of two-wheeler like Bajaj Auto has hit a life-time high while Hero Moto and TVS Motors have hit their respective 52-week highs. All this happened in the midst of weak and vulnerable markets. The expectation is that these two wheeler companies could now grow at double digit growth rates in the domestic market in FY22 on a low base.

Let us look at each of these stocks individually. TVS Motors rallied 5% to touch a level of Rs.548 and the stock has now gained 8% in just 2 days. It is also scheduled to announce its results on January 28 for the Dec-20 quarter and the markets will be watching the growth in volumes and the profits.

Let us not turn to Hero Moto, which rallied close to 4% to touch a level of Rs.3520, traversing nearly 8% in just 2 days. Hero Moto, is not only the largest manufacturer of motorcycles in India but it is also the largest manufacturer of motorcycles and scooters in the world. Last week, Hero Moto had surpassed the significant milestone of 10 crore units in cumulative production from the time of inception. Overall, it is a classic consumer play.

The big story has been about Bajaj Auto, which is at a life-time high. The stock touched a new high of Rs.4209 on Friday having rallied nearly 18% in just the last one week. The company posted stellar results on Friday and that also helped the stock up with an improvement in EBITDA margins, which is normally considered to be value accretive for auto stocks. Bajaj Auto has been a big gainer on its strong export focus which is 50% plus.

There is also an EV twist to Bajaj Auto. The company is actively working on an electric 3wheeler proposed to be launched later this year. Most of the supply-side issues pertaining to the e-Chetak are expected to be resolved in the next 3-4 months. The company also plans to expand its footprint to the top 24 cities across India. Most brokers are extremely positive on the two-wheeler space with special focus on Bajaj Auto.

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