Two-wheeler stocks may enter the fast lane riding on recovery hopes

Hero MotoCorp is the top pick of brokerages

The two-wheeler sector has been underperforming its peers on the volumes front for over five quarters now. Even in the March quarter, Bajaj Auto and Hero MotoCorp posted a 17-24 per cent YoY decline in volumes, the sharpest in the listed auto universe. The ongoing impact of frequent price hikes, all-time high fuel prices, and muted rural sentiment has led to the lacklustre showing by two-wheeler makers.

What has aggravated the situation for two-wheeler companies, which get almost all their sales from the internal combustion engine or ICE-based units, is the traction for electric two-wheelers (EV). 

Though it was a