Whalesbook
The strong rise in vehicle registrations points to growing market stability, helped by better financing options and positive consumer outlook. However, the electric vehicle segment shows very different outcomes for companies, and market values vary greatly among top manufacturers. This suggests the headline growth numbers hide complex trends.
April Sees Strong Two-Wheeler Sales Growth
In April 2026, India's two-wheeler market saw 1.916 million units registered, a significant 12.9% increase from the previous year. This marks a solid start to fiscal year 2027, showing sustained consumer interest. Although sales dipped 2.3% from March 2026, likely due to seasonal factors, the year-on-year growth on a higher base indicates underlying market strength. Hero MotoCorp led with 552,713 registrations but saw its market share slightly decrease to 29.21%. Honda followed with 472,274 units (24.96% share). TVS Motor Company reported strong growth of 18.32% to 369,158 units, and Bajaj Auto registered 201,713 units, up 9.74%. Royal Enfield and Yamaha also achieved healthy double-digit sales increases.
Electric Two-Wheeler Segment Shows Mixed Fortunes
The electric two-wheeler (e2W) segment, now making up almost 9% of total registrations, showed contrasting fortunes for key companies. Ather Energy saw its registrations surge by 100.78% to 27,394 units. In contrast, Ola Electric experienced a 38.63% drop, registering 12,166 units. This difference reflects ongoing market trends where Ather has increased its market share, even surpassing Ola in company valuation. Ola, meanwhile, has focused more on profitability than sales volume. Production challenges, such as China's restrictions on rare earth magnets, have affected several manufacturers, including Bajaj Auto and TVS Motor, complicating the electric vehicle supply chain.
Investor Valuations Vary for Key Players
Investor sentiment is also visible in the market valuations of these companies. Hero MotoCorp, the top seller, has a Price-to-Earnings (P/E) ratio near 18.5x, close to its 10-year average, suggesting a value-oriented price. Bajaj Auto trades at a P/E of about 27.6x to 31.4x, higher than its historical average, indicating a premium. TVS Motor Company has a much higher P/E ratio, between 56.7x and 77.8x. This high valuation, 15% above its 10-year median, suggests investors expect significant growth, potentially overlooking operational issues in the electric vehicle sector and slower industry growth forecasts.
Underlying Risks Remain Despite Sales Jump
Despite April's strong sales figures, several risks remain. Ola Electric's significant drop in April 2026, following a decrease in FY26 volumes, shows its difficulty in keeping market share while aiming for profit. Ather Energy's rapid growth compared to Ola's fall points to different strategies and execution by EV companies. Past data from April 2025 also showed sharp sales drops for models like the Hero Splendor (-38.34%) and Honda Activa (-25.17%), indicating that consistent year-on-year performance is not guaranteed even for market leaders. For established manufacturers, maintaining profit margins will require managing material costs and pricing carefully amid tough competition and potential weakness in rural demand, especially if the monsoon season is poor. The high P/E ratios for TVS Motor and Bajaj Auto suggest investors expect major future growth, which could be difficult given industry slowdown forecasts and EV supply chain risks.
Future Growth Forecasts Moderate
Looking ahead to fiscal year 2027, industry forecasts anticipate slower growth than the recent surge. Crisil Ratings expects the market to expand by 7-9%, while ICRA predicts a more moderate 3-5% growth. These predictions cite the high comparison base from the previous year and potential challenges for rural demand. Most two-wheeler makers are forecasting modest single-digit growth. Bajaj Auto has already mentioned a slowdown in demand momentum as sales are compared against a much higher base. The continued rise of electric vehicles, changing consumer choices, and potential new regulations will keep influencing the market's competition and profitability.