In recent times, two-wheeler sales have zoomed. The strong growth momentum started in the festive season of December 2025 quarter, continued into the March 2026 quarter, and also in April 2026.
Two-wheeler sales have benefited from the earlier GST cuts – 28% to 18% (for bikes up to 350 cc). Also, the earlier steps taken by RBI to lower rates of interest on loans including auto loans has also helped two-wheeler sales.
Today, we study the data, the key companies, and then try and identify a two-wheeler stock that can be put on the watch list of stocks for 2026. The goal is to identify a relatively reasonably valued stock offering strong growth potential. Dig in to find out.
Two-wheeler stocks hit 52-week highs
It’s no surprise that strong two-wheeler sales have led to investors showing strong interest in stocks from this sector – for instance, Bajaj Auto gained 1.1% to Rs 10,610 on Tuesday, and not too far from its 52-week high of Rs 10,799 that was reached on 25 May, 2026.
Meanwhile, TVS Motor Company was broadly flat on Tuesday at Rs 3,443, and it had reached its 52-week high of Rs 3,970 on 26 February, 2026.
And Hero MotoCorp was also broadly flat at Rs 4,990 on Tuesday, and it had reached its 52-week high of Rs 6,390 on 5 December, 2025.
Balancing valuations with growth potential
To help readers identify a two-wheeler stock for putting on their watch list of stocks for 2026, we looked at a popular valuation matrix as well as various operational parameters.
On the popular valuation matrix, price-to-earning (P/E) ratio, Hero MotoCorp trades at a standalone P/E of 18.6 times, according to Screener.in, while Bajaj Auto trades at a standalone P/E of 30.2 times and TVS Motor Company trades at a standalone P/E of 44.9 times.
The standalone operations of the respective two-wheeler company reflect their core auto operations.
Valuations: How the Two-Wheeler Companies Stack Up
| Two-wheeler company | Standalone P/E (x) |
| Hero MotoCorp | 18.6 |
| Bajaj Auto | 30.2 |
| TVS Motor Company | 44.9 |
Balancing Volume Growth with Realisations
A key feature of the sales growth for two-wheelers in the March 2026 quarter was the strong demand for recently launched models. Also, consumers have shown strong interest in electric two-wheelers at a time when the Middle East crisis has caused the shortage of various petroleum products in the country.
Also, two-wheeler companies, like other players in the broader auto sector , have had to deal with rising input costs, especially steel and copper, and investors are closely monitoring how these companies are dealing with this problem.
Performance in the March 2026 quarter (Y-o-Y growth)
| Two-wheeler company | Vehicle sales growth (%) | Sales growth (%) | Net Profit growth (%) |
| Hero MotoCorp | 24.1% | 28.8% | 29.7% |
| Bajaj Auto | 24.3% | 31.8% | 34% |
| TVS Motor Company | 28.3% | 34.1% | 31.2% |
Hero MotoCorp: How the VIDA Electric Range Powered a 29.7% Profit Jump
Hero MotoCorp grew its vehicles sales by 24.1% y-o-y to 1.71 million units in the March 2026 quarter. The company has highlighted it has gained market share in 100cc – 125cc segment led by Splendor, the upgraded Glamour X, Xtreme and HF Delux in motorcycles, and recently launched Xoom, Destini, and Pleasure in the scooter segment.
Also, its electric range of VIDA electric scooters reported strong demand once again from younger buyers. The company highlighted sales in this segment grew 190% y-o-y in FY26. The company has expanded its presence in electric scooters with the earlier launch of VIDA VX2 for the broader mass market.
As a result, Hero MotoCorp’s standalone net sales grew 28.8% y-o-y to Rs 12,796.5 crore in the March 2026 quarter, and its realisations grew nearly 3.7% y-o-y to Rs 74,658 per unit in the quarter under review.
Higher realisations helped the company’s operating profit margin rise almost 50 basis points y-o-y to 14.5% in Q4FY26. Hero MotoCorp’s standalone net profit also rose 29.7% y-o-y to Rs 1,401 crore in the March 2026 quarter.
Bajaj Auto: The Pulsar and Chetak C25 Driving a 34% Profit Surge
Bajaj Auto’s total sales grew 24.3% y-o-y to 1.37 million units in the March 2026 quarter. The company benefited from domestic sales of two-wheelers grew 24.1% y-o-y to 621,912 units in the March 2026 quarter. This was supported by strong demand for its Pulsar range coupled with its recently electric scooter Chetak C25.
Exports of three-wheeler commercial vehicles like Bajaj Maxima grew 38.6% y-o-y to 65,435 units in Q4FY26, while overseas sales of two-wheelers grew 23% y-o-y to 544,777 units in Q4FY26, thanks also to strong demand for its Pulsar model in Latin America and Africa.
As a result, Bajaj Auto’s standalone revenue from operations grew 31.8% y-o-y to Rs 16,005.7 crore in Q4FY26, and its realisations grew an estimated 5.5% y-o-y to Rs 1.16 lakh per unit in the quarter under review.
Improved realisations helped the company’s operating profit margin rise nearly 60 basis points y-o-y to 20.6% in the March 2026 quarter. Its standalone net profit also rose 34% y-o-y to Rs 2,746 crore in the March 2026 quarter.
TVS Motor: Navigating PLI Base Effects Amid a 51% EV Growth Engine
TVS Motor Company grew its vehicle sales by 28.3% y-o-y to 1.56 million units in the March 2026 quarter. The company has highlighted EV sales including iQube Smart Electric Scooter, jumped 51% y-o-y to 1.15 lakh units in the quarter under review. With this, TVS is becoming one of the largest players in the EV two-wheeler segment.
Also, its three-wheeler sales grew by 65% y-o-y to 60,000 units in the fourth quarter of FY26.
As a result, TVS Motor Company’s standalone revenue from operations grew 34.1% y-o-y to Rs 12,807.6 crore in the March 2026 quarter, and its realisations grew 4.5% y-o-y to Rs 82,077 per unit.
However, the company’s operating profit margin declined nearly 80 basis points y-o-y to 13.1% in Q4FY26. TVS Motor Company explained in its results press release that production linked incentive (PLI) benefit for FY25 was accounted for in Q4FY25, and the resulting high base effect resulted in lower margins this year.
Nevertheless, the 28.3% growth in its vehicles sales helped its net profit rise 31.2% y-o-y to Rs 997.7 crore in the March 2026 quarter.
FY27 Headwinds: Fuel Hikes, El Nino Risks, and the Margin Squeeze
The Middle East crisis has resulted in the central government making four hikes in retail petrol and diesel prices over the past two weeks. The impact of higher retail fuel prices on two-wheeler and three-wheeler sales will likely be visible in May 2026 and June 2026 monthly sales figures, going forward.
Also, with government bond yields higher as compared to a few quarters earlier, it has raised fears that auto loan rates may also show an upward trend, going forward. This in turn could hurt demand for two-wheelers, going forward.
Media reports have also pointed to possible El Nino impact this monsoon season, and its impact, if any, would be felt in sluggish rural sales for two-wheelers and three-wheelers, going forward.
However, in April 2026 monthly sales figures released earlier, no impact of Middle East crisis appears visible. For instance, Hero MotoCorp’s vehicle sales surged 85.4% y-o-y to 566,086 units in April 2026. And Bajaj Auto’s total vehicle sales grew 40% y-o-y to 513,792 units in April 2026.
Investors will also be monitoring two-wheeler companies and their ability to manage rising input costs, especially metals.
The 2026 Product Pipeline: Hero’s 12+ Launches vs Bajaj’s Premium Upgrades
Two-wheeler companies are going ahead with launches despite the Middle East crisis and rising petrol and diesel prices, and the resulting uncertainties in demand.
Hero MotoCorp has planned more than 12 launches during FY27, including Hero Karizma XMR 250, a 250cc motor bike, as well as new variants for its Vida electric range.
Bajaj Auto has planned an updated Pulsar 220F, and updates for Bajaj Chetak, its electric scooter.
TVS Motor Company has planned to launch TVS Raider 125 Flex-Fuel and TVS Fiero 125, alongside new EV additions like the TVS RTS X.
The Capital Efficiency Check: Tracking TVS Motor’s Sector-Leading 34.4% ROE
Hero Motocorp had a standalone ROE of 25.9%, according to Screener.in, while for TVS Motor Corp it was 34.4%.
Bajaj Auto has a standalone ROE of 29.3%.
Efficient use of capital – Return on Equity (standalone)
| Company Name | Return on Equity |
| Hero Motocorp | 25.9% |
| Bajaj Auto | 29.3% |
| TVS Motor Corp | 34.4% |
The Dalal Street Verdict: Is Hero MotoCorp the Ultimate 2026 Value Play?
As highlighted earlier, Hero MotoCorp trades at a standalone P/E of 18.6 times, according to Screener. Over the past 5 years, the stock has traded at a P/E between 15.4 times and 28.4 times.
Meanwhile, Bajaj Auto trades at a standalone P/E of 30.2 times, and over the past 5 years, it has traded between 17.6 times and 45.6 times.
TVS Motor Company trades at a standalone P/E of 44.9 times, and over the past 5 years, it has traded between 28.3 times and 63.9 times.
Hero MotoCorp trades at the lowest P/E amongst its peers. The company effectively trades at a discount of 40% to 60% depending on whether you compare with Bajaj Auto or TVS Motors.
Additionally, Hero MotoCorp trades near the lower end of its valuation band over the past five years. Investors could add Hero MotoCorp to their watchlist of stocks for 2026 and see if its performance matches expectations. A continued strong performance may just trigger a re-rating for this relatively undervalued stock.
Disclaimer
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
Disclaimer: The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.