Jefferies optimistic on Indian 2-wheeler market, cautious on Ola Electric

According to the firm, two-wheeler registrations in India grew at 4-5 per cent in January and the first half of February, following a strong performance during fiscal years 2022-24.

Jefferies projects a 13 per cent compound annual growth rate (CAGR) for the two-wheeler industry from fiscal 2024 to 2027, which translates to a modest 3 per cent CAGR over the longer period from fiscal 2019 to 2027.

“The domestic industry is seeing divergent growth among companies, with TVS Motor Co. outperforming with double-digit growth and registration market share rise”, Jefferies said in a note.

"Hero MotoCorp Limited and Bajaj Auto Limited, conversely, are lagging in domestic two-wheeler growth," it added.

The brokerage has expressed concerns over Ola Electric, citing its declining market share.

Ola Electric's market share in the electric two-wheeler segment has dropped significantly, falling from 49 per cent in the June 2024 quarter to just 17 per cent in the first half of February 2025.

The electric vehicle (EV) penetration in the two-wheeler segment remains stagnant at 4-7 per cent over the past two years. This is despite the launch of more affordable models by original equipment manufacturers (OEMs).

Jefferies noted that while lower ownership costs make EVs attractive, widespread adoption still depends on consumer confidence in product reliability, longevity, and resale value.

Meanwhile, Bajaj Auto and TVS Motor have emerged as strong contenders, each holding a market share of 22-26 per cent in the January-February period, the brokerage said.

According to data from the government’s VAHAN portal, Ather Energy also gained traction, with its market share rising to 14 per cent in December from 11 per cent the previous month, an increase of 3 per cent.