It’s a segment of the auto industry that is racing ahead and investors are tracking the growth very closely.
Yes, the two-wheeler segment is zooming ahead on the growth highway ahead of the festive season thanks to broadly very strong export growth coupled with buoyant demand for electric two-wheelers.
To get greater insight we looked at two-wheeler sales in July, 2026, and August, 2026; and compared to the corresponding two-month period a year earlier. That’s because August 2025 was a low base effect with the Russia – Ukraine war and other global macro- factors.
In addition, to deal with the broad sluggishness in the economy, the central government had announced the reduction in GST rates for two-wheelers and other sectors of the economy on 3 September, 2025, and they had become applicable on September 22, 2025.
Investors ‘enjoy’ the ride in two-wheeler shares
Bajaj Auto ended 0.8% lower on Friday to Rs 11,920, and the stock is not too far from its 52-week high of Rs 12,470 that was reached on 1 September, 2026.
Meanwhile, TVS Motor Company ended 1.5% lower on Friday to Rs 4,136 and not far from its 52-week high of Rs 4,484.7 that was reached on 26 August, 2026.
And Hero MotoCorp ended 0.2% higher on Friday to Rs 5,303. Hero MotoCorp trades at a discount of 39%-61% to its peers (view table below), as the company’s exports are a small portion of its total monthly vehicle sales. Hero MotoCorp has largely missed out on the export boom enjoyed by Bajaj Auto and TVS Motor Company over the past several quarters, and that is reflected in its valuations.
To get a greater insight on the trends in the two-wheeler sector, we also examined the combined growth in exports and electric two-wheelers in July 2026 and August 2026 y-o-y for the leading players – Bajaj Auto, TVS Motor Company and Hero MotoCorp.
Bajaj Auto – Overseas sales drives growth in July 2026 and August 2026
The festive season in Africa and Latin America starts in early October till Christmas. Leading exporters from India, Bajaj Auto and TVS Motor Company are in a rush to get their models delivered to showrooms across these two vast continents, which are experiencing a strong demand for ‘affordable’ independent travel vehicle.
Sales in Africa and Latin America are key driving factor for Bajaj Auto
Bajaj Auto grew its total vehicle sales by 28% y-o-y to 5,35,764 units in August 2026, and that was thanks to a surge in exports of two-wheelers and commercial vehicles. Bajaj Auto has highlighted that two-wheeler exports grew 53% y-o-y to 241,850 units in August 2026. Bajaj Auto exports two-wheeler models like Pulsar and Boxer, and the company has benefited from very strong demand from Africa, especially from Nigeria, along with Latin American countries.
For perspective, the company’s exports of two-wheelers jumped 52% y-o-y to 6,36,005 units in the June 2026 quarter.
Also, Bajaj Auto’s commercial vehicles including three-wheelers exports grew 39% y-o-y to 38,206 units in August 2026. For perspective, Bajaj Auto’s commercial vehicles including three-wheelers, overseas sales grew 69% y-o-y to 96,168 units in the first quarter of FY27.
A similar trend was visible in July 2026 – exports powered 30% y-o-y growth in total vehicle sales to 4,74,677 units. Bajaj Auto’s exports of two-wheelers grew 42% y-o-y to 2,22,972 units, and overseas sales of commercial vehicles grew 22% y-o-y to 31,513 units.
Growth of Bajaj Auto, TVS Motor and Hero MotoCorp in July, 2026 and August, 2026 (%) y-o-y
| Parameter | Bajaj Auto | TVS Motor Company | Hero MotoCorp |
| Growth in August 2026 monthly sales (%) y-o-y | 28% | 21% | 2.6% |
| Growth in July 2026 monthly sales (%) y-o-y | 30% | 38% | 18.6% |
| Growth in total sales in July, 2026 and August, 2026 (%) y-o-y | 28.9% | 29% | 9.8% |
| Growth in total export sales in July, 2026 and August, 2026 (%) y-o-y | 45.2% | 29% | -19.2% |
| Growth in electric scooter sales in July, 2026 and August, 2026 (%) y-o-y | – | 147.2% | 78.3% |
TVS Motor – electric two-wheeler sales surge 147.2% y-o-y in July, 2026 and August, 2026
A similar trend was also visible for TVS Motor Company with exports and electric two-wheelers driving monthly sales growth.
Electric two-wheeler sales surge
TVS Motor Company grew its August 2026 sales by 21% y-o-y to 6,16,540 units. Growth for TVS Motor Company was powered by its electric two-wheeler sales that jumped 137% y-o-y to 59,453 units in August 2026, and that was thanks to popularity of its models like TVS iQube.
Electric two-wheelers are typically 10-25% more expensive than conventional petrol engine two-wheelers. However, with the Middle East crisis resulting in retail fuel prices for petrol crossing Rs 100 per litre, consumers are increasing opting for electric two-wheelers.
A similar trend was witnessed in July 2026, with electric two-wheeler sales jumping 158% y-o-y to 60,934 units, and it helped total vehicle sales grow 38% y-o-y to 6,29,675 units.
Exports are also the growth engine for TVS Motor Company –
Two-wheeler overseas sales of TVS Motor Company registered a growth of 29% y-o-y with sales of 1,57,641 units in August 2026. Including three-wheelers, its overseas sales grew 29% y-o-y to 1,74,452 units.
And that is attributed to strong demand for its models like HLX, Apache and Raider in Latin America, Africa and Asia.
In July 2026, total exports of the company jumped 29% y-o-y to 184,264 units.
For perspective, TVS Motor Company’s overseas sales grew nearly 34% y-o-y to 0.47 million units in the first quarter of FY27.
Hero MotoCorp – growth from domestic sales – misses out on export boom
For Hero MotoCorp, growth in July, 2026 and August, 2026 were largely driven by improved sales in the local market in the run up to the festive season. And since its exports are a small proportion of total vehicle sales, its total monthly sales growth lagged its peers.
In August, 2026, total vehicle sales of the company barely grew 2.6% y-o-y to 5,68,398 units, with scooter sales rising 42.8% y-o-y to 74,547 units. Growth in scooter segment was powered by sales for its electric scooter model, VIDA that grew 38% y-o-y to 25,558 units. Export sales of the company shrank nearly 24.5 % y-o-y to 26,093 units.
In July, 2026, the company’s total vehicle sales grew 18.6% y-o-y to 5,33,416 units with its motorcycle segment benefiting for strong demand for models like Splendor and new Passion and upgraded Super Splendor XTEC 2.0. Motorcycle sales grew 17% y-o-y to 4,68,565 units.
Sales of its electric scooters surged 102% y-o-y to 22,714 units. However, exports declined 14.4% y-o-y to 32,013 units.
Performance in the June 2026 quarter
Hero MotoCorp has broadly not participated in the export boom in the June 2026 quarter, and its performance has lagged peers, Bajaj Auto and TVS MotorCorp on various parameters (view table).
Bajaj Auto v/s TVS Motor Company v/s Hero MotoCorp in the June 2026 quarter (standalone results)
| Parameter | Bajaj Auto | TVS Motor Company | Hero MotoCorp |
| Growth in vehicle sales (% y-o-y) | 29% y-o-y | 27.7% y-o-y | 22.7% |
| Growth in net sales (% y-o-y) | 37% y-o-y | 37.8% y-o-y | 35.7% |
| Growth in net profit (% y-o-y) | 42.3% y-o-y | 51.5% y-o-y | 29.2% |
Rising prices of key inputs for two-wheelers, like steel and copper continue to worry investors on Dalal Street. Two-wheeler companies in early August 2026 had hiked prices of vehicles between 1% -3%, and investors will continue to watch if these manufacturers are suitably able to pass on higher input costs coupled with operational efficiency.
Return on Equity (RoE) – which company is speeding ahead with capital efficiency?
Bajaj Auto had a standalone Return on Equity of 29.3%, according to Screener.in, while for TVS Motor Company it is 34.4% and 25.5% for Hero MotoCorp.
Return on Equity – Bajaj Auto v/s TVS Motor Company v/s Hero Motocorp
| Return on Equity (RoE) | |
| Bajaj Auto | 29.3% |
| TVS Motor Company | 34.4% |
| Hero MotoCorp | 25.5% |
Growth outlook and valuations of two-wheeler stocks
Bajaj Auto, TVS Company and Hero MotoCorp have launched new / upgraded models recently including TVS iQube ST Variantsand Bajaj Auto’s Pulsar 150.
Investors will continue to monitor demand for various two-wheeler models during the festive season, and any signs / trends of consumers upscaling their purchases.
Of equal importance, investors will watch raw material costs for two-wheeler players are their ability to pass on higher costs.
Valuations of Bajaj Auto versus TVS Motor Company versus Hero MotoCorp
| Two-wheeler company | Standalone P/E |
| Bajaj Auto | 30.5 times |
| TVS Motor Company | 48.6 times |
| Hero MotoCorp | 18.7 times |
Bajaj Auto trades at a standalone P/E of 30.5 times, and over the past 5 years, it has traded between 17.5 times and 45.6 times.
Meanwhile, TVS Motor Company trades at a standalone P/E of 48.6 times, and over the past 5 years, it has traded between 28.3 times and 63.9 times.
And Hero MotoCorp trades at a standalone P/E of 18.7 times, and over the past 5 years, it has traded between 15.4 times and 28.4 times
Two wheeler companies are expected to continue their strong sales growth, going forward, despite the Middle East crisis. However, Hero MotoCorptrades at a discount of nearly 39%-61% to Bajaj Auto and TVS Motor Company. The discount appears to reflect the underperformance, both on volume sales, and financial parameters, of Hero MotoCorp as compared to its peers. For the discount to narrow from hereon, the company will need to deliver on atleast one of these parameters.
Readers could put Hero MotoCorp along with Bajaj Auto and TVS Motor Company on their watch list of stocks for 2026, and see if their performance matches expectations.
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.
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