Global brokerage firm Citi has raised its FY27 growth forecast for the two-wheeler (2W) industry to 9% year-on-year (YoY), from 7% earlier, following stronger-than-expected volume performance in the first half of the financial year. The brokerage has increased its earnings estimates for major two-wheeler manufacturers, including Hero MotoCorp, TVS Motor, Bajaj Auto and Eicher Motors.
Citi expects healthy retail demand, new product launches and improving rural trends to support the industry outlook. However, it remains cautious about margins amid elevated commodity costs and intense competition.
Among two-wheeler original equipment manufacturers (OEMs), Citi prefers Eicher Motors, while Endurance Technologies is its preferred pick in the auto components segment.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Eicher Motors, Hero MotoCorp: Citi's Top Picks
Citi has maintained its ‘Buy' rating on Eicher Motors and raised its target price to Rs 9,500 from Rs 8,850. The brokerage has increased its Royal Enfield volume estimates by 3-7% for FY27-FY29, supported by strong demand and capacity expansion. Earnings estimates for the company have been raised by 1-2%.
For Hero MotoCorp, Citi has retained its ‘Buy' rating and increased the target price to Rs 7,200 from Rs 6,670. However, weaker domestic market share, which declined 20 basis points YoY in 1HFY27, has limited the upward revision in volume estimates to 0-2%. Earnings estimates have been increased by 2-3%.
ALSO READ: Infosys, TCS Only Large-Cap IT Stocks With Re-Rating Potential: Jefferies
Citi Remains Cautious On TVS Motor, Bajaj Auto
Citi has maintained its ‘Sell' rating on TVS Motor despite raising its target price to Rs 3,500 from Rs 3,100. Earnings estimates have been increased by 8-9% for FY27-FY29, driven by higher volume assumptions. However, elevated valuations, capacity costs and recent moderation in market share remain concerns.
For Bajaj Auto, Citi has retained its ‘Sell' rating and target price of Rs 10,000. While earnings estimates have increased by 3-5%, domestic market share losses have constrained volume upgrades. Better exports are expected to support overall two- and three-wheeler volumes.
Auto Ancillaries: Endurance Preferred
Citi has maintained its ‘Buy' rating on Endurance Technologies and raised its target price to Rs 3,550 from Rs 3,350. Meanwhile, Varroc Engineering's target price has been increased to Rs 640 from Rs 540, but its ‘Sell' rating remains unchanged.
ALSO READ: Catch Stock Market Live Updates Here
Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
