Auto Stocks: Bajaj Auto and Hero Moto share targets reduced- report explains what is the crisis

Big brokerage house Jefferies has released its report on the auto sector. Two-wheeler companies are especially in focus. The report shows that the landscape of competition in the market has changed a lot. TVS has achieved a new milestone, while Hero Moto has reached its weakest level in the past. Bajaj Auto's situation is also under pressure. Investors should consider investing in select companies only.

Let's understand through the report- Bajaj Auto and Hero Moto's shares have fallen. Due to this report, there is a reduction in the target of both the shares. Volume growth estimates for FY26-27 have been reduced by 6ppt/2ppt. EPS estimates have been cut by 5-11%. Low volumes remain a big concern for both these companies.

Let's take a look at the report of JEFFERIES..
 

Hero Moto's crisis deepens - for the first time in 20 years, it has the lowest market share (in domestic two-wheelers). Price target has been reduced by a huge amount of about ₹1,875. Bajaj Auto also suffered a setback - target has been reduced by ₹3,000 due to slow volume growth and increased competition in the market. Jefferies has faith in TVS and Eicher. TVS Motor - has the highest market share in 18 years in domestic two-wheelers. A new record has also been set in exports. EPS estimate cut by 2-3%, but some relief from the benefits of PLI scheme. Target has been reduced from ₹3,050 to ₹3,225. Eicher Motors - Target has been increased marginally to ₹6,700. Rating 'Buy' remains intact. Industry Outlook (FY26-27): Two-wheeler industry volume growth forecast cut by 6 percentage points (ppt). But 10% CAGR growth expectation remains for FY25-28.

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