Bajaj Auto or Hero MotoCorp? Which stock should investors prefer after the new premium motorcycle launches

livemint.com:

Bajaj Auto and Hero MotoCorp are trading at their respective 52-week high levels after a rally fuelled by the recent launches in the premium motorcycle segment. Bajaj Auto, on July 5, unveiled Speed 400 and Scrambler 400X, co-developed with Triumph Motorcycles. While earlier this week, Hero MotoCorp also made in-roads into the segment with the launch of Harley Davidson X440, a fully indigenized 440cc motorcycle it has co-created with the Milwaukee-headquartered cult motorbike maker,  Bajaj-Triumph Speed 400 comes with a starting price of ₹2.33 lakh (ex-showroom), while Hero-Harley Davidson’s X440 was launched at nearly similar starting price of ₹2.29 lakh (ex-showroom).

Triumph twins and the 440cc cruiser bike would rival the likes of RE Classic 350 and Hunter 350. However, the pricing of these bikes is at just around 19-20% premium to Royal Enfield’s Classic 350. Also Read: Bajaj-Triumph Speed 400 and Scrambler 400 X make roads into India, price starts at ₹2.33 lakh Analysts believe the new launches will help Hero MotoCorp and Bajaj Auto gain substantial share in the premium market which is largely dominated by Royal Enfield.

Global brokerage Jefferies believes that Indian two-wheelers are ripe for a strong recovery from an abnormal cyclical trough and expects industry volumes to rise at an 18% CAGR in FY23-25. It expects Hero MotoCorp’s volumes and EPS to grow at a 14% and 26% CAGR, respectively, over this period. For Bajaj Auto, Jefferies expects volumes and EPS to EPS to grow at 15% and 23% CAGR, respectively over FY23-25.