Shares of the world's largest two-wheeler company Hero MotoCorp surged up to 4 percent following a budgetary allocation of Rs 2.66 lakh crore for rural development including spend on rural infrastructure.
The Budget emphasized increasing rural income, which is anticipated to drive demand for automobiles, especially two-wheelers. This sector, which has been leading industry growth for the past few quarters, is set to receive further impetus from these measures.
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A pick-up in rural consumption or a revival in the rural economy typically benefits two-wheeler manufacturers like Hero, Bajaj Auto, and TVS Motors as their entry-level bikes could see an increase in sales from the aspirational middle class.
At about 1 pm, Hero MotoCorp shares were trading 2 percent higher, while Bajaj Auto shares slipped 1 percent. TVS Motor, on the other hand, rose over 1 percent.
Read: Aptech, TeamLease, other job-related stocks surge on Budget proposals to boost employment
The Budget 2024 didn't introduce the widely-expected FAME 3.0 (Faster Adoption and Manufacturing of Electric Vehicles), targeting the affordability and adoption of electric two-wheelers. Industry experts thought that this initiative would help accelerate the growth of electric mobility in the country.
Read more: Tata Motors, M&M, Maruti shares decline as Budget 2024 skips EV, hybrid emphasis
Data from the Society of Manufacturers of Electric Vehicles (SMEV) showed that total two-wheeler EV sales stood at 9,44,126 units in FY24, a 30 percent rise from FY 23 where total sales stood at 7,28,054. SMEV is a registered association representing Indian manufacturers of electric vehicles and electric vehicle components. It works closely with central and state governments to assist in formulating policies and processes to support the EV ecosystem.
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