INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Shares of motorcycle makers Hero MotoCorp, Bajaj Auto and TVS Motor touched their 52-week lows on Monday amid talks that the
two-wheeler mart is going to witness a cut-throat price war in the days ahead.
Analysts have started discounting a price war after Bajaj
Auto, in an analyst call, indicated its intention going for aggressive pricing and, if needed, compromising margins in order to dominate the
market.
Shares of the two-wheeler makers have been under strong pressure ever since
On Monday, even as the broader market sentiment remained positive and shares of top auto makers such as Maruti Suzuki and Tata Motors
witnessed decent gains, the entire two-wheeler pack tumbled
The upbeat mood of the market, fuelled by lowering of GST levies over 100 discretionary items, failed to stem the fall in the two-wheeler
space.
Shares of Hero MotoCorp plunged 6.20 per cent, those of Bajaj Auto 5.35 per cent and TVS Motor Company 4.27 per cent
The top brass at Bajaj Auto said they were targeting 15 per cent topline growth CAGR over the next two to three years, and most of this
growth is expected to come from the motorcycle segment
This view was against the market perception that the company would go more for premiumisation
Cost pressure will continue in September quarter as well, the company said in the concall
Arihant Capital in a note said the company was focusing on gaining market share, which may also be a reason why it may be prepared to give
up some margins.
During June quarter, realisation of the two-wheeler maker declined 1.3 per cent YoY (-6.6 per cent QoQ) due to a higher
share of entry-level two-wheelers
On the other hand, raw material cost was higher by 140 bps, largely due to an adverse product mix and commodity cost inflation.
For the Hero
In the last three sessions, the stock has lost nearly 10 per cent
Bajaj Auto slipped for the second session in a row and has erased nearly 14 per cent
Indian equity market extended its winning streak to a second consecutive session on Monday, underpinned by gains in select auto, FMCG and
bank stocks, including ITC, ICICI Bank and Maruti Suzuki
The BSE Sensex settled 222 points or 0.61 per cent higher at 36,719, its all-time high
