Two-wheeler industry poised for significant revenue growth between FY24-FY26, says study

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The Indian automobile industry is projected to register eight per cent year-on-year (YoY) growth in revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) for the second quarter of FY25. The two-wheeler segment is poised to record significant growth between FY24 and FY26, claims a study by Nuvama Wealth and Investment Limited. This comes in contrast with the single-digit growth projected for the passenger vehicle segment.

The study has pointed out that automakers like Mahindra & Mahindra, TVS Motor Company, Bajaj Auto, Hero MotoCorp and Royal Enfield to post major growth. It noted that the domestic two-wheeler sales volumes are estimated to grow by approximately 15 per cent YoY in the second quarter of this fiscal, driven by improved rural demand, continued urban consumer interest and accessible financing options. According to the study, Bajaj Auto is expected to post 25 per cent YoY growth in the aforementioned period, while TVS, Hero MotoCorp and Royal Enfield would register 16 per cent, seven per cent and nine per cent growth, respectively.

Passenger vehicle industry to see a slight decline

In a stark contrasting scenario, the domestic passenger vehicle industry is expected to witness a slight decline, as the sales volumes are expected to drop by about one per cent YoY. Two major carmakers Tata Motors and Maruti Suzuki are expected to post a three per cent and one per cent revenue decline, respectively. However, Mahindra will be an exception, projects the study. Buoyed by a wide range of SUVs on offer, a rapidly rising demand for utility vehicles in India is expected to drive Mahindra's revenue to grow by 12 per cent.

Indian auto sector records a slight decline

The projection comes at a time when domestic passenger vehicle sales slipped to 358,886 units in September 2024, down from 362,876 units recorded in September 2023, registering a 1.1 per cent year-on-year decline.

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