Two-Wheeler Stocks Hit 52-Week Lows

Stock prices of three companies, Bajaj Auto Hero MotoCorp, and Ola Electric, sharply fell 52-week lows due to weak domestic sales, higher losses, and operational problems. Here is the thorough investigation of the reasons for the downward trend and the future prospects of Bajaj Auto, Hero MotoCorp, and Ola Electric.

Bajaj Auto Hero MotoCorp, Ola Electric Hit 52-Week Lows: Here’s Why

Shares of major two-wheeler companies, including Bajaj Auto, Hero MotoCorp, and Ola Electric Mobility, have plummeted to their respective 52-week lows, declining by up to 6% on the BSE during Monday’s intra-day trade. The stocks have witnessed a significant drop, falling between 40% and 66% from their 52-week highs. Here’s a detailed analysis of the factors contributing to this decline and the current state of these companies. Read More

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Ola Electric: A Deep Dive

Stock Performance

• Current Price: Rs 53.71 (hit a new 52-week low)
• Decline: 6% intra-day drop on BSE
• Volume Surge: Average trading volumes more than doubled, with 26.68 million equity shares traded on NSE and BSE.
• Issue Price: Rs 76 (trading 29% below issue price)
• Record High: Rs 157.53 (August 20, 2024)
• Correction: 66% from its all-time high

Challenges Faced by Ola Electric

1. Rising Losses:
   • Net loss widened to Rs 564 crore in Q3 FY25, up from Rs 376 crore in the same quarter last year.
   • Layoffs of over 1,000 employees and contract workers to curb losses.
2. Registration Issues:
   • Renegotiation of contracts with vehicle registration agencies temporarily affected VAHAN portal registrations in February 2025.
3. Market Leadership:
   • Despite challenges, Ola Electric sold 25,000+ units in February 2025, capturing a 28% market share in the EV two-wheeler segment.

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Bajaj Auto: Struggling with Domestic Demand

Stock Performance

• Current Price: Rs 7,682.75 (hit a fresh 52-week low)
• Decline: 3% intra-day drop on BSE
• Underperformance: Fell 14% in the past month, compared to a 5.3% drop in the BSE Sensex and 12% in the BSE Auto index.

Sales Performance (February 2025)

• Total Sales: 352,071 units (2% YoY growth)
  • Domestic Two-Wheeler Sales: 146,138 units (14% YoY decline)
  • Exports: 153,280 units (23% YoY growth)

Challenges

1. Domestic Market Share:
   • YTD FY25 retail market share down by 62 basis points.
   • Softening demand for its CNG bike.
2. Export Market Recovery:
   • Management expects 6-8% growth in FY25, with green shoots in export markets.

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Hero MotoCorp: Declining Sales and EV Strategy

Stock Performance

• Current Price: Rs 3,616.90 (hit a fresh 52-week low)
• Decline: 2% intra-day drop on BSE
• Correction: 42% from its 52-week high of Rs 6,245 (September 24, 2024)

Sales Performance (February 2025)

• Total Sales: 388,068 units (17% YoY decline)
  • Domestic Two-Wheeler Sales: 357,296 units (20% YoY decline)
  • Exports: 30,772 units (33% YoY growth)

Key Focus Areas

1. EV Strategy:
   • Investments in Ather Energy.
   • Ramp-up of VIDA V2 and launch of Vida V2 Lite (sub-Rs 1 lakh model).
2. Mid-Weight Motorcycle Segment:
   • Facing growing competition.
3. Government Initiatives:
   • Rural income enhancement and tax cuts in the Union Budget expected to boost demand.

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Industry Outlook

Growth Drivers

1. Export Recovery:
   • Double-digit volume growth expected in FY25.
2. Government Support:
   • Tax rationalization and rural income initiatives.
3. Marriage Season:
   • Expected to drive demand in the entry and 125cc segments.

Projections

• FY25 Volume Growth: 6-10%
• FY26 Volume Growth: 8-10%

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Feature Table: Key Metrics

Metric	Ola Electric	Bajaj Auto	Hero MotoCorp
52-Week Low	Rs 53.71	Rs 7,682.75	Rs 3,616.90
Decline from High	66%	40%	42%
February 2025 Sales	25,000+ units	352,071 units	388,068 units
Domestic Sales Growth	N/A	-14% YoY	-20% YoY
Export Growth	N/A	+23% YoY	+33% YoY
Market Share	28% (EV 2W segment)	N/A	N/A

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Conclusion

The two-wheeler industry is facing headwinds due to softening domestic demand, rising competition, and operational challenges. While Ola Electric continues to lead the EV segment, it grapples with widening losses and layoffs. Bajaj Auto and Hero MotoCorp are struggling with declining domestic sales but are seeing growth in exports. The industry’s recovery hinges on government initiatives, export market recovery, and successful EV strategies. Investors should closely monitor these developments before making investment decisions.