Two-Wheeler Makers Poised to Outpace Auto Sector Profit Growth

The brokerage projects a significant earnings surge for major players, forecasting a 45 percent year-on-year rise in pre-exceptional profit before tax for TVS Motor Company. Bajaj Auto and Eicher Motors are expected to follow with growth rates of 26 percent and 14 percent respectively. This momentum is supported by robust wholesale figures, with two-wheeler volumes climbing 16 percent, while medium and heavy commercial trucks saw a notable 40 percent increase.

Despite these gains, the financial outlook remains tempered by persistent margin contraction. Aggregate EBITDA margins are anticipated to shrink by 2.3 percentage points compared to last year. While revenue for covered OEMs is slated to jump 27 percent, EBITDA growth will likely lag at just 7 percent due to the rising expense of raw materials. Tractor sales remain the outlier, suffering a 5 percent decline attributed to a high base and inconsistent monsoon performance.