Domestic motorcycle manufacturer TVS Motor Company has achieved an important achievement. Just a year ago it was less than half the size of Japanese two-wheeler maker Yamaha Motor Co. Now TVS Motor has left Yamaha behind in terms of market valuation. This change in fortunes is due to investor optimism about the improvement in both domestic and export markets.

TVS Motor's market capitalization (MCAP) has grown 37% to $9.2 billion in the last six months. In contrast, Yamaha Motor's mcap has declined $1.6 billion from its August peak. According to the latest data, Yamaha Motor Company has a market capitalization of $8.8 billion, which is $348 million less than the mcap of TVS Motor.

It is interesting to know that four of the top five two-wheeler companies in the world are from India. Bajaj Auto leads with an mcap of $19 billion, followed by Eicher Motors with an mcap of $11.5 billion. Hero MotoCorp is at fifth position with a market valuation of around $8 billion.

TVS Motor has achieved a dominant position in the electric scooter market and has been gaining market share across segments in recent years. Its market share in scooters increased from 16% to 23% between FY18 and Q1FY24. In the 125cc+ bike segment it increased from 13% to 17% during the same period.

Analysts at Jefferies believe the Indian two-wheeler industry is poised for a strong recovery after a challenging period, estimating a 15% volume compound annual growth rate (CAGR) from FY23 to FY26. He expects TVS to benefit significantly from this recovery in both domestic and export markets and the improvement in its franchise will provide scope for further margin expansion.

Notably, US-based company Harley-Davidson is ranked seventh among the top two-wheeler manufacturers with an mcap of $4.3 billion, while three Chinese manufacturers also feature in the top ten global rankings.