Bajaj Auto, Hero MotoCorp, TVS: Two-wheeler makers post strong October sales growth amid cost overhang; what’s next?

Two-wheeler stocks like Bajaj Auto, Hero MotoCorp, TVS Motor Co., and Eicher Motors posted strong year-on-year (YoY) growth in their overall sales volumes for October 2026 at a time when margins remain under pressure due to the elevated cost of raw materials in the market.

The October sales data released on November 1 showed that, across the board, Indian two-wheeler manufacturing companies witnessed a healthy increase in units sold due to the beginning of the festive season demand.

In the current third quarter, festive season demand acts as a key momentum for auto companies, with customers purchasing more during the auspicious season of Navaratri, Durga Puja and the upcoming Diwali festival.

Market experts highlight that the overall two-wheeler demand remains healthy in the Indian market, with rural demand at par with or ahead of urban demand. The healthy October sales data comes after an overall improvement in financial performance in the Q2 results.

“While mix tailwinds from EV, scooters and PAM are improving, we see core margin recovery as back-ended and earnings growth moderating,” said analysts from Antique Stock Broking, an institutional brokerage firm.

Management commentary indicates that while some companies are bullish on their premiumisation strategy, others are focusing on expansion in their entry-level segments, offering a variety of products to the customers at a time when margins remain under pressure.

Sales data October 2026

Margins remain under pressure

In the Q2 earnings, one of India’s largest two-wheeler manufacturers, Bajaj Auto, posted a 35% year-on-year (YoY) rise in its net profits to ₹3,353 crore, from ₹2,479 crore, with its consolidated revenues surging 60% while the margins remained under pressure.

Although Bajaj Auto’s operating profits increased 44% YoY in the September quarter, the EBITDA margins contracted by 250 basis points to 19.7%, from 22.2% in the same period a year earlier.

While overall strong profitability growth was largely driven by improved operational efficiency and strong sales volumes, the margins contracted due to elevated raw material costs.

Hero MotoCorp’s standalone net profit surged 5% to ₹1,456 crore for the quarter ended September 30, 2026, with revenues rising 21% YoY to ₹14,687 crore, as per the exchange filings.

Despite the decent Q2 performance, Hero MotoCorp’s earnings missed market estimates, with EBITDA margins contracting to 13.39% levels, from earlier 15.03% levels on a year-on-year basis due to material cost overhang.

Data showed that TVS Motor Co.’s Q2 revenues surged 44% YoY, with profits rising 52% to ₹1,377 crore driven by the high sales volumes including the electric vehicles segment.

Two-wheeler EV manufacturer Ather Energy finally turned profitable in Q2 FY27 with the help of the company’s strong revenue growth derived from its healthy demand for products along with the brand’s recent expansion into the entry-level scooter market segment.

Ather Energy reported a net profit of ₹1.26 crore compared with a loss of ₹154 crore in the same period last year, with its revenues surging 63% YoY to ₹1,464 crore. The EV maker’s EBITDA margins came in at 0.80% in the period.

Bhavish Aggarwal-led two-wheeler EV maker Ola Electric is yet to announce the official date of its Q2 FY27 earnings release, as investors pin their hopes on the potential for its net losses to further contract as its biggest rival turned profitable in the September quarter.

Last quarter, Ola Electric’s management said that they are focusing on cost structure and vertical integration, which can potentially power margin expansion and lower the cash burn. Investors will be keeping a close watch on the financials for signs of recovery in the upcoming Q2 results.

Along with Ola Electric, Royal Enfield manufacturer Eicher Motors is also yet to announce the official date of its Q2 FY27 results. Healthy growth in sales data shows higher potential for earnings growth in the September quarter despite margin pressure in the market.

What do analysts predict?

Analysts from Antique Stock Broking, an institutional brokerage firm, said that Hero MotoCorp’s margin recovery is expected to be back-ended, with the company’s near-term profitability increasingly reliant on discretionary cost cuts and continued underperformance in the premium motorcycle segment.

“The sustainability of discretionary cost reductions remains a key monitorable, given the need to reinvest in the brand,” said Antique analysts.

The experts also said that the concentration risk in the company’s exports business keeps concerns elevated about the brand perception and Hero MotoCorp’s right to win intact.

Other market experts also said that input cost inflation has been sticky for the last three quarters in a row, and the latest product price hikes in two-wheelers in October only cover the cost hike to an extent.

If the costs continue to rise in the market due to the global supply chain disruptions and the elevated cost of raw materials, the upcoming Q3 margins will be difficult to sustain for Indian two-wheeler automakers.

Certain two-wheeler makers like TVS Motor’s focus on its premium segment, Bajaj Auto’s strong Chetak demand, and Hero MotoCorp’s volume growth combined with favourable product mix and pricing actions are expected to power earnings in the upcoming quarters.

However, margin pressure will continue to remain an overhang on these automakers till the rising raw material costs, commodity prices, and volatile foreign currency rates ease in the global market.

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