New Delhi, Jun 6 (IANS): Ratings agency ICRA on Monday said that the two wheeler segment is on a demand recovery path after "encountering bumps" in the past five months due to post-demonetisation liquidity crisis.

According to an ICRA report, the industry witnessed a de-growth in both the key product segments - motorcycles and scooters - during the last five months (November 2016-March 2017), resulting a compression of 6.5 per cent over last year.

"Among the various two-wheeler product segments, both scooters and motorcycles were significantly impacted by the demonetisation exercise, while mopeds continued to report growth on their low base," said Subrata Ray, Senior Vice President and Group Head, corporate sector ratings at ICRA.

"The new fiscal has also started off with a growth of 7.3 per cent in April 2017, with the impact of demonetisation wearing off and both major product segments gradually reporting an uptick in their growth rates."

The industry had posted a strong double-digit growth over last year across all the product segments between April to October 2016.