Eicher to TVS Motor: Why Jefferies is betting on two-wheelers this festive season

Jefferies favours two-wheeler makers Eicher Motors and TVS Motor as festive-season registrations show stronger demand for two-wheelers than passenger vehicles.

Two-wheeler registrations are up 16% year-on-year (YoY) despite a high base, whereas PV registrations are down 6% YoY, global investment bank Jefferies said in a report, citing auto registration data. Jefferies prefers two-wheelers over four-wheelers among original equipment manufacturers.

Strong demand momentum in two-wheelers

The domestic two-wheeler industry is witnessing strong demand in the first half of the ongoing month-long festive season. Despite a high base post the goods and services tax cut in 2025, registrations have risen in the first 14 days of the festive season, from October 11 to October 24.

For the first half of financial year 2027 (FY27), two-wheeler registrations grew 22% YoY while wholesales rose 17% YoY.

PV demand tapering off

Demand momentum in PVs seems to have moderated in the second week of the festive season, with registrations declining 6% YoY. PV registrations were healthy in the first week, rising 7% YoY.

For the first half of FY27, PV registrations and wholesales grew 28-29% YoY.

Truck, tractor registrations firm

The festive season has started strong for trucks and tractors as well. "Truck registrations in the first 14 days are up 76% YoY, although boosted by low base as volumes declined 26% YoY in the corresponding period last year. Versus 2024, truck registrations have grown at 14% CAGR in the first half of the festive period," Jefferies said.

Tractor registrations are also up a healthy 21% YoY, although concerns remain on demand in the second half of FY27 due to a high base and a weak monsoon.

Navratri sales

Indians bought 11.23 lakh vehicles during the 10-day Navratri period this year, according to Federation of Automobile Dealers Associations (FADA).

Vehicle retail sales rose nearly 27% compared with Navratri 2024, when Indian customers brought 8.86 lakh vehicles. However, vehicle retail sales declined 6.52% year-on-year compared to the 12.01 lakh units sold during Navratri 2025.

"As we enter the Dhanteras-to-Diwali wave, we remain cautiously optimistic: affordability is strong, aspiration is rising, and auto retail continues to mirror the enduring momentum of the India Growth Story," FADA President Sai Giridhar had said.

However, FADA says, the comparison is not like-for-like as Navratri lasted 11 days last year, compared with 10 days this year. The festive period in 2025 also coincided with the rollout of GST 2.0, which brought forward pent-up demand.

Jefferies' top auto picks

Global investment bank Jefferies prefers two-wheelers over four-wheelers among original equipment manufacturers.

Jefferies' preferred 'Buys' are Eicher Motors and TVS Motor Company, followed by Mahindra & Mahindra.

What investors should watch next?

Demand for trucks, tractors, and two-wheelers remain firm while PV demand has been mixed. The festive demand and buying trends over the next two weeks remain key and will be monitored closely.