Patchy numbers, slowdown in rural demand weighing on two-wheeler stocks: Taher Badshah

In a chat with ET Now, Taher Badshah, Motilal Oswal AMC, shares his view on the factors that are weighing on two-wheeler stocks.

ET Now: I would like to draw your attention to what is happening in the two-wheeler space. It was once a hot space. Even as interest rates are coming down, stocks of two-wheeler makers such as Bajaj Auto, Hero MotoCorp and TVs have offered flat to negative returns. Why?

Taher Badshah: The stocks are coming off due to the fact that the weakness in the sector still prevails. The last couple of months were not too good and there have been concerns over rural demand in particular, which is not too strong at this moment.

The moderation in rural demand may get a little worse before it gets better over the course of the year. That is probably what is reflecting on the stocks of two-wheeler makers. We have seen that even the quarterly numbers by two-wheeler companies have been patchy.

To some degree all the three names that you mentioned have their own individual factors which probably also influence their stock performance. Having said that, by and large, it is the overall sectoral overhang which is punishing on these names.