Budget brings cheers to companies in 2W space

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Budget brings cheers to companies in 2W space

Interim Budget 2019 brought cheers to companies in the two-wheeler (2W) space. The stock prices of which rose sharply: Hero MotoCorp up seven percent, Bajaj Auto up two percent and TVS Motor Company up four percent.

The 2W segment has been under the cloud for the past couple of months due to multiple macro-economic challenges led by higher interest rate and liquidity crunch. These, coupled with increase in total cost of ownership driven by mandatory long-term insurance cost, have led to subdued demand for 2Ws both in rural and urban areas. The impact of weak demand was visible in the latest quarterly financial performances of companies as well.

What could uplift the demand sentiments in 2W segment is the announcement to provide relief to individual taxpayers by increasing the maximum amount of tax rebate to Rs 12,500 from the existing Rs 2,500. The tax rebate should now be admissible to taxpayers having total income up to Rs 5 Lakh, instead of the existing Rs 3.5 lakh. The standard deduction limit has been increased to Rs 50,000 from Rs 40,000 earlier to bring in some savings to tax payers. These announcements are expected to increase the disposable income of individuals and thereby increase discretionary expenses such as buying a motorcycle or a scooter.

Hero MotoCorp, Bajaj Auto and TVS Motor are expected to be the beneficiaries of these announcements.

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Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

2019-02-03 07:38:50

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

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