TVS Motor, Eicher gain up to 4% in weak market. What's driving 2W stocks?

Business Standard

2 days ago

Two-wheeler companies shares price today
Shares of two-wheeler (2W) companies TVS Motor Company, Eicher Motors, Hero MotoCorp and Bajaj Auto rallied up to 4 per cent on the BSE in Friday's intra-day trade in an otherwise subdued market.
At 01:02 PM; these stocks were trading higher by up to 2 per cent. In comparison, the BSE Sensex was down 0.41 per cent and the BSE Auto index slipped 0.74 per cent. CATCH STOCK MARKET LIVE UPDATES
What's driving 2-wheeler stocks today?
The outperformance of 2W stocks today was seen after Eicher Motors and TVS Motor Company reported healthy earnings for the quarter ended June 2025 (Q1FY26). These companies also reported strong sales for the month of July.
According to analysts, the domestic 2W industry growth is expected to be supported by improved consumer sentiment, a pickup in rural demand due to a normal monsoon, repo rate cuts, and improving liquidity. Demand in the international market is also improving gradually.
Shares of Eicher Motors rallied 4 per cent to ₹5,669.85 as the company's margin performance on the standalone basis (Royal Enfield franchise) in June 2025 quarter (Q1FY6), came above analyst's expectations at 25.1 per cent (up 40 bps QoQ).
Despite macroeconomic challenges, Eicher remains growth-focused, expanding the middleweight motorcycle segment and strengthening brand positioning globally. VECV outperformed the industry with record volumes, underpinned by strong execution, & market share gains across segments.
Meanwhile, Eicher Motors reported a 31 per cent year-on-year (Y-o-Y) increase in total motorcycle sales at 88,045 units for the month of July 2025. The company had sold 67,265 units in the month of July 2024.
Eicher stands well-positioned to sustain its growth momentum, backed by a strong brand, disciplined cost control, and prudent capital allocation. Hence, we maintain a positive outlook on the company, expecting it to deliver double digit returns in the medium to long term, ICICI Securities said in a note.
TVS Motors reported healthy performance in Q1FY26 with a 17.5 per cent Y-o-Y growth in total sales volume, at 1.28 million units. The company's operating earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved by 100bps at 12.5 per cent in Q1FY26 as against 11.5 per cent in Q1FY25. The company posted its highest profit before tax (PBT) of ₹1,053 crore recording a growth of 35 per cent for Q1FY26.
Going forward the company expects an increase in commodity prices to the tune of 0.5 per cent while expecting strong growth from both domestic & export market in the coming festive season.
A richer mix, higher operating leverage, and astute cost management are expected to drive margin performance. However, analysts at JM Financial Institutional Securities see a marginal impact on margin due to magnet constraints and commodity-linked cost inflation.
Meanwhile, TVS Motor Company recorded monthly sales of 456,350 units in July 2025 with a growth of 29 per cent as against 354,140 units in the month of July 2024.
In FY 2025-26, the Indian two-wheeler industry is poised to build upon the growth trajectory observed over the preceding three fiscal years. This optimistic outlook is underpinned by several factors, viz. a strengthening of rural demand, recovery of demand in the core motorcycle and scooter markets, a sustained acceleration in the adoption of electric vehicles (EVs), and an anticipated higher growth rate within the premium motorcycle segment, Hero MotoCorp said in FY25 annual report.
Rural India continued to drive industry growth, with two-wheeler demand rising 8 per cent - outpacing urban markets. This was backed by good monsoons, higher MSPs for crops, and increased employment under government schemes, the company said.