Two-wheeler demand to taper off; 4-wheelers to hold ground

Independent market expert Sandip Sabharwal of asksandipsabharwal.com says two-wheeler demand is going to taper off and two-wheeler companies will throw up significantly worst numbers over the next two-three months. Excerpts:-

What do you make of Thursday’s 7 per cent move in Maruti from Rs 7,750 to almost Rs 8,000? Isn’t it a wildly expensive stock now?
I think that is what was happening. We have seen a huge runup in stocks like Tata Motors, M&M, and two-wheeler stocks have moved up continuously on decent numbers and positive commentaries from the managements. When the Maruti management give a positive commentary, the market usually takes it at face value, because they are typically conservative unlike many of the two-wheeler companies, which continuously come out and give bullish projections on what is happening on the ground.

So it was intriguing, actually that Maruti was not moving at all when all other stocks zoomed. I think a catchup rally is happening there. It is a largecap stock, which has actually not performed. So after the initial runup, it was at Rs 7,000 or between Rs 6,700-7.100 to Rs 7,200 for weeks, I think some catchup is happening now. I think two-wheeler demand is going to taper off and we will see significantly worst numbers for two wheeler companies over the next two-three months. But the demand for passenger vehicles and four-wheelers is sustaining and should sustain going forward, as that is being driven more by low interest rates and availability of funds.