Stock Prices ignoring BSVI Disruption

The current recovery in stock price of 2 wheeler companies appears to be ignoring the disruption that lies ahead on account of BS6 emission norms (Apr’20 deadline). 2W prices likely to increase materially due to BS6 in an already weak demand environment

Inventory remains high

While a good festive season can help clear out some of the 45-60 days inventory; this will not lead to better wholesale volumes for the OEMs

Margin pressures to remain high

There are high discounts and schemes across brands/ OEMs. Admittedly, festive schemes are a usual norm but the discounts this time are fairly steep given the weak demand sentiment and need to clear BS4 inventory.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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