Barclays cautious on two-wheelers, cuts Bajaj Auto

Barclays remains cautious on India's two-wheeler makers, saying domestic demand has decelerated "significantly", while noting that Honda Motor Co's "aggressive" capacity expansion plans could limit growth of its rivals.

"Given the increased competition, we forecast further market share loss for the incumbent players and believe the risk of increased price discounts or subvention schemes is high," Barclays said in a research note on Thursday.

Barclays downgraded Bajaj Auto Ltd to "equal weight" from "overweight" with a price target of Rs 1,862.

The bank also maintained its "underweight" ratings on Hero MotoCorp Ltd and TVS Motor Co Ltd.

Barclays said Bajaj is better positioned than Hero and TVS as exports are expected to be 40 per cent of its total volumes in FY14 and it has a strong product pipeline.

At 12.29 pm, Bajaj Auto was down 0.38 per cent and Hero MotoCorp was down 1.68 per cent, while TVS Motor was up 0.28 per cent.

Copyright: Thomson Reuters 2013