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Bajaj Auto, TVS Motor, Hero MotoCorp, and Eicher Motors received share price target hikes from Citi
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Citi raised two-wheeler industry volume growth estimates to 9% for fiscal 2026 and 7% for 2027 and 2028
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GST cut to 18% from 28% on two-wheelers under 350cc expected to boost demand with 7-8% price reductions
Bajaj Auto Ltd., TVS Motor Co., Hero MotoCorp, and Eicher Motors Ltd. received share price target hikes from multinational brokerage Citi. The optimism comes from higher projected sales and earnings for two-wheeler makers in the coming three years.
Multiple macro tailwinds like income tax and GST cuts and expected reductions in interest rates will lead to volume and earnings growth, analysts said.
Citi increased the two-wheeler industry volume growth estimates for fiscal 2026 to 9% and 7% for fiscal 2027 and 2028. "This revision in industry volumes buoy our earnings estimates for 2W OEMs," a note said.
The GST rate reduction to 18% from 28% on two-wheelers with less than 350cc engine, which constitutes 99% of volumes, is likely to boost demand due to 7-8% price cuts, analysts said.
Commentary
Market share concerns continue to hang over Bajaj Auto. Analysts said the Avenger-maker has the least exposure to domestic two-wheelers and a high export proportion, thus the impact of GST cuts could be relatively lower. Its domestic motorcycle market share has seen the sharpest decline this year among peers.
For TVS Motor, high valuation weighs on its future potential. While the company benefits from GST cuts, exposure to domestic bikes is lower compared to Hero MotoCorp. Competition also remains elevated, Citi said.
Citi Share Price Targets
Hero MotoCorp – Maintain 'Buy'; Hike target price to Rs 6,100 from Rs 5,200. Potential upside of 14% over the previous close.
Eicher Motors – Maintain 'Buy'; Hike target price to Rs 7,850 from Rs 6,300. Potential upside of 14% over the previous close.
Bajaj Auto – Maintain 'Sell'; Hike target price to Rs 7,900 from Rs 7,300. Potential downside of 13% over the previous close.
TVS Motor – Maintain 'Sell'; Hike target price to Rs 2,800 from Rs 2,100. Potential downside of 20% over the previous close.
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