Better demand, tailwinds keeping Street positive on 2-wheeler stocks

Stronger rural demand, festive inventory build-up and GST cut optimism are boosting sentiment on two-wheeler stocks, though valuations now near long-term averages

Given the stronger rural activity, and potential goods and services tax (GST) impact, investors are bullish on the two-wheeler (2W) segment.

 

In August, dealers in the domestic market picked up 11 per cent more 2Ws year-on-year (Y-o-Y), despite only 2 per cent growth in retail registrations. This indicates inventory stocking ahead of the festival season.

 

Export trends were good. TVS Motor and Royal Enfield may have gained domestic market share.

 

GST rate cut hopes have pushed the Nifty Auto Index up 10 per cent, with valuations now close to long-term averages.

 

So, the rebound may already have been discounted to