Margin woes crash two-wheeler makers' 'joy' ride, stocks take a beating

10-12 per cent growth will translate to record volume, but commodity inflation and competition could affect gains

Two-wheeler stocks have been the biggest underperformers in the auto pack and have shed between 7.5 per cent and 15 per cent over the last month, in contrast to the 4 per cent gains for the broader markets. Analysts say the trend may not change given the pressure on margins due to firm input costs, high competitive intensity and price discounting strategy of some players.

Strong demand

The weak investor appetite comes at a time when the demand and volume outlook for the sector remains strong. After clocking over 14 per cent volume growth in FY18, the two-wheeler sector has reported a