Just when the two-wheeler industry seemed poised to lift the spirits of the automobile sector, a slowdown may be looming. Bajaj Auto has added to the mounting concerns, trimming its growth outlook for two-wheeler sales in India to a modest 5 percent—down from its earlier range of 5-8 percent.
For context, two-wheeler sales in September took a sharp hit, falling 10 percent month-on-month and 8.5 percent year-over-year, as weak consumer sentiment, low inquiry levels, and dwindling foot traffic hurt demand. Seasonal factors like the Shraddh period, Pitrapaksha, and heavy rains further dampened the market, leading to delayed purchases and a subdued buying environment.
Meanwhile, the passenger vehicle (PV) segment is in deeper trouble. Sales plunged by 10 percent MoM and a striking 18.81 percent YoY, highlighting a troubling trend of waning consumer interest and growing market pessimism. The combination of seasonal lulls, heavy rains, and an overall sluggish economy has left dealers sitting on alarmingly high inventory levels—around 7.9 lakh vehicles worth Rs 79,000 crore, according to FADA data, with inventory stretching to 80-85 days.
With this backdrop, both dealers and OEMs are now pinning their hopes on festive season sales, especially in rural markets where favorable agricultural conditions and improved cash flow are expected to fuel demand. But the road ahead remains uncertain. A strong October is essential, not just to offload excess inventory but also to set the stage for steady growth through the rest of FY25.
Axis Bank (Rs 1,196.95, 5.75%)
Reported strong Q2 numbers.
Bull Case: The bank’s asset quality showed improvement in Q2, easing concerns that arose after the Q1 results. Credit costs were much lower on a quarter-on-quarter basis, and one-off gains were used to bolster contingency provisions. The management holds a strong positive long-term outlook.
Bear Case: Falling deposit growth and low credit offtake can impact the private sector lender, especially since loan and deposit growth were soft every quarter. For the quarter, core revenue growth remained subdued and growth concerns linger.
Wipro (Rs 547.8, 3.6%)
Shares gained after the IT giant delivered earnings that exceeded street expectations on all major fronts, marking its first sequential revenue growth in six quarters of decline.
Bull Case: Has a strong deal pipeline and solid financials for the long term. Deal wins improved on account of vendor consolidation opportunities and AI-powered
solutions. On the vertical front, the BFSI sector showed a modest improvement of 0.3 percent QoQ.
Bear Case: Wipro has a strong deal pipeline and solid long-term financials. However, its execution lags behind peers, limiting the company's ability to capitalize on growth opportunities fully. Rising subcontracting costs and cross-currency headwinds, as per Axis Securities, may negatively impact the company's operating margins.
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