UBS has maintained its buy rating on TVS Motor and Eicher Motors while retaining a sell call on Hero MotoCorp and Bajaj Auto. The investment bank’s report sheds light on various factors influencing the two-wheeler industry, with particular focus on market trends and competitive dynamics.
Heavy discounting observed in two-wheeler sector
One of the key highlights from the UBS report is the increasing discounting seen across the two-wheeler sector. According to UBS, e-commerce platforms are witnessing substantial price cuts, especially for two-wheelers. These discounts are expected to remain high during the ongoing festive season, creating a highly competitive pricing environment.
Electric two-wheelers gaining traction
The report also notes that the entry-level pricing for electric two-wheelers (e-2W) is now significantly below that of the best-selling internal combustion engine (ICE) motorcycles and scooters. This growing affordability is driving consumer interest towards e-2Ws, impacting the sales of traditional ICE models.
Market share dynamics: TVS Motors up, Hero MotoCorp down
In terms of market share, UBS highlighted that TVS Motor is steadily gaining ground in the two-wheeler space. Conversely, Hero MotoCorp appears to be losing market share, which has contributed to UBS’s bearish stance on the company. TVS’s robust performance and expanding footprint in the e-2W segment are seen as key growth drivers for the company.
UBS continues to recommend a buy rating on TVS Motor and Eicher Motors, while retaining a sell rating on Hero MotoCorp and Bajaj Auto amidst changing market dynamics.
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