Buy

GST Rationalization: Structural boost for the industry: Government has announced GST 2.0 reforms thereby reducing GST rates for the automobile sector across the segments and value chain, small cars, 2-W's up to 350cc, and 3-Ws will now attract 18% GST vs. 28% earlier which enables the 2W domain to expect healthy volume growth in FY26E led up upbeat demand sentiments in the rural economy amid healthy farm produce and positive 2025 monsoons. Domestically, RE dominates in the premium segment, where it has a ~84% market share in the 250-750cc category. RE drives...

We maintain our BUY rating on the stock.

Bajaj Auto’s (BJAUT) Q2FY26 operational performance was broadly in line with our estimate. Domestic 2W industry growth is expected to pick-up pace (~6-8% volume growth) going ahead led by the benefit of GST rationalisation and strong festive season.

Quarter of milestones, EV and exports to fuel growth About the stock: Bajaj Auto (BAL) is the second largest motorcycle manufacturer and largest 3-W OEM domestically. It also has a presence in export markets. Strong momentum across core and new growth drivers: Bajaj Auto saw broad-based recovery across domestic, export, and EV segments, reflecting the company's strategic agility and diversified portfolio. Exports reached an all-time high, supported by geographical diversification and local assembly initiatives in Latin America, ensuring resilience against...

EBITDA surged by 40% y/y to Rs15.1bn, broadly in-line with our estimate. Our positive stance on the stock is backed by expected upturn in 2W volume (domestic/exports), led by GST relief and better financing availability.

We maintain our BUY rating on the stock.

TVS Motor Company’s (TVS) 2Q PAT at INR9.1b was below our estimate of INR9.9b, even as the EBITDA miss was just 2%. PAT miss was largely driven by higher interest and depreciation expenses, along with a loss on the fair valuation of its investment in TVS Supply Chain.

TVSL logged a healthy Q2, with 29% YoY revenue growth and 12.7% EBITDAM (vs 11.7/12.5% YoY/QoQ). Per the management, the domestic 2W industry grew 24% during the festive season (urban/rural: ~26/22%), with TVSL outpacing peers with ~32% growth.

Arrive at a revised TP of Rs 5,960/share (earlier from Rs 5,900/share). Hence, we maintain a BUY rating on the stock, with an 11% upside from the CMP.

Arriving at a revised TP of Rs 3,810 (Earlier: Rs 3,085), implying an upside of 11% from the CMP. We hence maintain our BUY rating on the stock.

Looking ahead, Eicher Motors is well placed to capitalise on rising premiumisation trends and sustained rural demand. Its strategy to broaden customer base, particularly by targeting a younger demographic, is gaining traction and is expected to further fuel its growth trajectory. Additionally, continued momentum in the export market, supported by robust demand and expansion initiatives, bodes well for its future performance. With a strong pipeline of upcoming launches and continued progress on its EV roadmap through the Flying Flea brand, the company is poised...

The demand environment remains positive, driven by good monsoons, benign interest rates, tax reliefs, and the festive season in addition to strong exports. FY26 capex is expected to be Rs. 1,600-1,700 cr. The company also plans to make strategic investments of Rs. 2,000 cr in FY26. Management indicated commodity cost pressures of around 0.5% in Q2, which they intend to...

We maintain our BUY rating on the stock.

Bajaj Auto’s (BJAUT) EBITDA margin at 19.7% was in-line with I-Sec estimate. Demand in international market has been driving the growth momentum and the company has guided for 15-20% YoY volume growth in exports in nearto-medium term.

Hero MotoCorp (HMCL)’s 1QFY26 PAT at INR11.2b came in above our est. of INR10.5b, led largely by higher other income. HMCL was able to retain its margins despite weak volumes due to price hikes and an improved mix.

We upgrade from HOLD to BUY rating on the stock.

We recommend a BUY rating on the stock with a TP of Rs 9,115/share, implying an upside of 10% from the CMP

We maintain our BUY rating on the stock.

EBITDA increased 4.1% YoY to Rs. 1,416cr, driven by a favourable product mix. However, margin contracted 10bps YoY to 14.2%. Notably, the EBITDA margin for the internal combustion engine (ICE) business stood at 16.1%, benefitting from an...

Hero MotoCorp’s (HMCL) 4QFY25 margins remained stable YoY and were also in line with our estimates. Reported EBITDA margin came in at 14.2%, while ICE margins stood at 16.1%, adjusted for the INR1.43b loss in EV business.