Investor exuberance in two-wheeler stocks: A risky proposition?
It is worth noting that Bajaj and Hero’s two-wheeler volumes for the first five months of FY24 are still about 16% and 36% lower than pre-covid levels of FY19 for the same period, respectively.
Shares of two-wheeler companies are in the fast lane, suggesting a rosy outlook. This is perplexing given that the demand conditions are painting quite the opposite picture. For one, rural demand is subdued with weak rainfall adding to the woes. Further, price increases by two-wheeler companies are suppressing demand.
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