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HMSI continues to gain share in 2Ws; MM and Toyota outperform in PVs

* We have analyzed the segmental volume data for Oct’24 and YTDFY25 for 2W/PV segments. 2W ICE segment continues to outperform, with 14.6% YoY growth in YTDFY25, compared with muted 0.6% YoY growth for PV segment.

* Within 2Ws, the ICE scooter segment has posted 18.4% YoY growth YTD, the motorcycle segment has seen ~13% YoY growth. HMSI is the only player to gain market share in the 2W ICE segment in YTD (+ 320bp YoY to 28.9%) and it is also the only player to gain in all major sub-segments of 2Ws.

* The PV industry grew by a modest ~0.9% YoY in Oct’24 and ~0.6% in YTDFY25. UVs continue to outperform, with their contribution to PVs now increasing to 64.8%. Key outperformers this fiscal are MM and Toyota, which have gained market share by 220bp and 180bp, respectively, for YTDFY25 in PVs. Despite gaining share in cars and maintaining share in UVs, MSIL’s market share declined by 170bp YoY to 40.6% in PVs, due to its higher mix in cars.

* Our top picks in auto OEMs are MSIL, MM and Hyundai.

HMSI is the only player to gain market share in ICE 2Ws

* The domestic 2W industry’s volumes grew ~12.5% YoY in Oct’24 and 14.6% YTD.

* While the motorcycle segment has grown 13% YoY for YTD, ICE scooters have grown 18% YoY.

* However, it is pertinent to note that excluding HMSI, the motorcycle segment’s growth stands at only 8.3% for YTD.

* HMSI is the only company to gain market share so far in FY25, up 320bp YoY to 28.9%. However, after a strong ramp-up in the last couple of months, HMCL has now reclaimed its market leader position with a 29.9% share YTD in FY25, followed by HMSI at 28.9%.

Segmental trends: Motorcycle segment:

* As highlighted above, the domestic motorcycle industry has posted 13% YoY growth YTD.

* HMSI has significantly outperformed this segment with 37% YoY growth YTD, and increased its market share by 350bp to 19.9%.

* All the top 4 companies in the segment, including HMSI, have underperformed industry growth.

* While BJAUT’s market share has declined by ~150bp to 16.9% YTD, HMCL and TVS have lost ~50bp share each. Even RE has lost ~60bp share.

100cc segment:

* The segment continues to underperform the industry and has posted ~9% YoY growth so far in FY25.

* HMSI has significantly outperformed the industry with 34.5% YoY growth for YTDFY25. Even HMCL has outperformed the industry with 10% YoY growth.

* As a result, HMSI has gained 140bp share to 7.4% and HMCL has gained 80bp share to 77.5%.

* For HMCL, Splendor continues to be its key growth driver, with 16.5% YoY growth YTD. On the other hand, while HF has grown by 4%, Passion has posted 27% YoY decline in volumes.

* TVSL/BJAUT have lost market share by 50bp/170bp YTD to 6% and 9%.

125cc segment:

* The segment continues to outperform the motorcycle segment and has posted ~20% YoY growth so far in FY25.

* HMSI has grown 34% YoY and has recovered its share by 480bp to 43.4%.

* Even HMCL has outperformed this segment on the back of healthy demand for its Xtreme125R and has posted 24% YoY growth for YTD. HMCL has gained 70bp share to 20.5%. It is important to highlight that while Xtreme125R has done well, it seems to have also cannibalized its own models in the segment: Glamour sales down 15% YoY and Splendor sales down 29% YoY.

* Market share for BJAUT/TVSL declined by 270bp/290bp to 24.5%/11.6% for YTD.

* For BJAUT, Pulsar125 volumes have declined 1% YoY for YTD. BJAUT seems to have discontinued CT125 as well. Its growth in this segment has been primarily driven by incremental volumes of Freedom 125cc (sold 30k units in Oct’24).

150-250cc segment:

* This segment has posted ~17% YoY growth on YTD basis.

* Here again, HMSI has significantly outperformed the segment with 56% YoY growth YTD. As a result, it has gained 540bp share to 21.2%.

* TVSL has also done well, with 29% YoY growth YTD and 230bp share gain to 23.4%.

* On the other hand, segment leader BJAUT has underperformed the industry and posted just 7% YoY growth on YTD basis. It has lost 290bp share to 31.1%.

* Despite its new launches, HMCL continues to post weak numbers. It has posted a decline of 12% YoY on YTD basis in this segment and its share is now down by 100bp to 2.9%. Scooters ICE segment

* The segment has seen 18% YoY growth YTD.

* HMSI has gained 180bp market share to 49.8%, largely from HMCL (down 170bp to 5%).

* Both TVSL/Suzuki have largely maintained their share in FY25 in scooters at 23.5%/16.1%.

PV update – UV mix further rises to 64.8%

* PV industry grew by a modest ~0.9% YoY in Oct’24 and ~0.6% in YTDFY25.

* UV contribution has now increased to 64.8% so far in FY25.

* In the PV segment, MSIL’s market share has fallen by 170bp YoY to 40.6%, mainly due to a consistent decline in the passenger car segment, in which MSIL has a higher share.

* Key outperformers this fiscal are MM and Toyota, which have seen their market share rise by 220bp and 180bp, respectively, for YTDFY25. Hyundai and Kia recorded moderate gains of 70bp and 20bp, respectively. TTMT, however, lost 40bp YoY.

Car segment:

* The segment declined 17.9% YoY in Oct’24 and 18.4% YTD.

* MSIL has gained 310bp share to 65.4%. Toyota is another player to gain market share by 60bp YTD.

* TTMT has likely to have lost 280bp market share to about 10%.

UV segment:

* The segment, on the other hand, grew by ~13% YoY for both Oct’24 and YTD.

* Among top gainers, MM has gained 140bp share to 19.6% and Toyota has gained 190bp share to 9.2%. MM’s growth is driven by Scorpio (+32% YoY), XUV 3XO (+68%), and XUV 700 (+17%). Thar (3-door) sold 2,717 units and Thar Roxx sold 5227 units in Oct’24.

* TTMT has also gained market share by 40bp YTD to 14.9%.

* MSIL maintains its market share in UVs at 25.8%. MSIL’s growth driver in this segment is Ertiga (+44% YoY), Fronx (+21%), and Brezza (+12%).

* On the other hand, Hyundai/Kia have lost market share by 60bp/90bp YTD to 15%/9%.

Valuation and view

* While the 2W segment has outperformed PVs so far in FY25, we expect its growth to moderate for the rest of the year.

* MSIL is our top pick among auto OEMs as it continues to be a play on the rural recovery with attractive valuation. We like MM for its healthy demand momentum in both SUVs and tractors for FY25. We also like Hyundai as it appears well aligned to benefit from the industry trends toward UVs

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