Jefferies revises down ratings on Hero MotoCorp, Bajaj Auto

New Delhi: Global brokerage firm Jefferies on Tuesday downgraded Hero MotoCorp and Bajaj Auto, citing a weak outlook for the two-wheeler industry in the coming years.While Hero MotoCorp has been downgraded to ‘underperform’, Bajaj Auto has been rated as ‘hold’. Jefferies has also slashed the price targets of Hero and Bajaj Auto by a large margin.

The price target for Hero MotoCorp has been cut by 37 per cent to Rs3,200 from the earlier Rs5,075. For Bajaj Auto, the target has been reduced by 28 per cent to Rs7,500 from Rs10,550. Jefferies believes the overall volume growth in the two-wheeler industry for FY26 and FY27 will be slower than expected, reducing its growth estimates by six and two percentage points, respectively.

Still, it expects a 10 per cent annual growth rate for the sector between FY25 and FY28, as it highlighted that the competitive dynamics in the two-wheeler industry have shifted.

Jefferies cut earnings estimates for Hero and Bajaj Auto by 11 per cent and 5 per cent, respectively, as Hero MotoCorp’s market share in the domestic market has fallen to a 20-year low.