Hero Moto, TVS Motor at record high post August sales data

Hero is confident of keeping up this growth momentum heading into the festive season, with as many as 10 new launches, including new models, upgrades and refreshes, during this period.

New bike Splendor Pro Classic will be available in dealerships across the country in the coming weeks, it said.

Meanwhile, another two-wheeler maker TVS Motor reported a 46 percent growth in August total sales at 2.27 lakh units year-on-year. Its 2-wheeler sales grew by 47 percent to 2.17 lakh units while exports rose by 28 percent to 35,074 units YoY and 3-wheeler sales jumped 39 percent to 9,820 units.

Pune-based Bajaj Auto's total sales increased by 8 percent year-on-year (up 5.6 percent month-on-month) to 3.37 lakh units. S Ravikumar, president - business development & assurance, expects to see total sales of 4 lakh units in next few months.

"New Discover sales will grow to 25,000-30,000 units per month. We expect 3-wheeler sales of 55,000 units per month going forward," he said.

Analysts expect two-wheeler companies to maintain strong sales growth in coming months on the back of festivals like Ganapati, Dassera and Diwali.

"Domestic two-wheeler (2W) volumes have positively surprised in August-14 and have grown by an estimated 23 percent Y-o-Y to 1.39 million units. Year-to-date (YTD) industry growth at 15.5 percent Y-o-Y is running higher than our FY15 growth forecast of 12 percent," said the Deutsche Bank in its note.

For Hero, the brokerage raised FY15-17E earnings per share forecasts by 4 percent and target price by 10 percent to Rs 2150. For TVS, it increased FY15-17E EPS forecasts by 7-8 percent and target price by 12 percent to Rs 180.

DB maintains sell rating on Hero Motocorp and hold on Bajaj Auto and TVS Motor.

At 10:04 hours IST, Hero Motocorp rose 1.11 percent to Rs 2,790 and TVS Motor Company climbed 3.15 percent to Rs 199.50 on the BSE.

Posted by Sunil Shankar Matkar