While we expect competitive intensity to hurt the profitability of the two wheelers’ (2Ws) executive segment in India, we are optimistic about the premiumisation trends playing out. Moreover, our analysis of Africa/LATAM 2Ws markets suggests significant opportunities for Indian 2W exporters. While we believe Bajaj is well positioned to benefit from premiumisation and exports, Hero looks vulnerable to margin pressures in the executive segment. We also think market share gains/margin expansion for TVS will not be easy. Initiate coverage on Bajaj (Buy), Hero (Hold) and TVS (Sell).  

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