The shares of leading two-wheeler makers rallied on March 21 after CLSA issued a bullish note, observing that premium motorcycle sales have outperformed the entry-level segment so far this fiscal.
In its latest report cited by ET Now, the brokerage said that while the overall motorcycle volumes increased 5 percent on-year so far in FY25, the entry-level segment saw a decline of nearly 11 percent. The sales volumes of entry-level bikes have more than halved from its pre-COVID levels. The premium segment however rose 8 percent on-year.
Bajaj Auto
CLSA said Bajaj Auto lost the most market share in the 125-250 cc category, falling by 700 basis points in the last one year as the sales volume of its popular model Pulsar dropped 5 percent. However, the brokerage said that it prefers the shares of Bajaj Auto as it believes the stock is set to benefit from the rising demand for its 125-250 cc models after the recent correction.
Bajaj Auto shares jumped nearly 2 percent to trade at Rs 8,074 apiece. CLSA kept an 'Outperform' rating on the stock, with a target price of Rs 9,473 per share. The latest target price implies an upside potential of nearly 17 percent from the stock's current market price.
TVS Motor
TVS Motor shares jumped over 4 percent to trade at Rs 2,445 apiece. This comes as the stock sees heavy trading volumes. CLSA kept a 'Hold' rating for the stock, with a target price of Rs 2,511 per share. This implies an upside potential of nearly 3 percent from the stock's current market price.
Hero Motocorp
CLSA said that the high sale volumes seen by the newly launched Hero Xtreme 125R increased the premium market share by 800 bps in the last one year to date. The executive segment, which consists of motorcycles priced between Rs 95,000 and Rs 1.25 lakh, saw a fall in Hero's market share by 600 bps. Honda's market share however rose by 400 bps.
Hero Motocorp shares rose nearly 2 percent to trade at Rs 3,659 apiece. CLSA kept an 'Outperform' rating for the stock with a target price of Rs 4,940 per share, implying an upside potential of over 35 percent from the current market price.
Eicher Motors
Eicher Motors shares also rose nearly 2 percent each to trade at Rs 5,319 apiece. For the maker of Royal Enfield bikes, the brokerage kept a 'Hold' rating with a target price of Rs 5,395 per share. This implies an upside potential of over 1 percent.
These stocks were notably the top gainers on the Nifty Auto index, which was up over 1.5 percent to stand at 21,965.
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