Global investment bank Jefferies said two wheelers should lead with 26-45% growth for TVS Motor Company /Bajaj Auto and 14% for Eicher Motors. The GST-driven demand boost continued in September quarter with double-digit volume growth across trucks, PVs, and 2Ws, while tractors declined.
Choice Broking has an add call on Bajaj Auto with a target price of Rs 11,700. The brokerage expects revenue to expand by 24.9% YoY, led by a 19.7% increase in volume and 4.0% growth in ASP. Volume expansion is led by exports, exhibiting an increase of 40.7% YoY, while domestic sales grew 4.0% YoY. EBITDA margin is projected to rise by 45 bps YoY to 20.9%, and PAT is expected to grow by 25.4% YoY to Rs 3,108.5 crore. Key factors to watch out in earnings are new launches performance, Chetak EV profitability and KTM-Triumph integration progress.
Systematix Institutional Equities has a buy call on Bajaj Auto with a target price of Rs 12,425.
Bajaj Auto’s diversified growth drivers, robust export business and improving earnings profile support a positive medium-term outlook. The company has consistently maintained EBITDA margins of around 20% over several quarters, while EBITDA per vehicle has remained above Rs 24,000 for the past two quarters. The performance reflects premiumisation, a favourable product mix and a rising contribution from higher-margin businesses, said the brokerage.
Bajaj Auto has also strengthened its position in the electric two-wheeler (E2W) segment, emerging as the second-largest player. This provides an opportunity to capitalise on the accelerating shift towards electric mobility, following its relatively late entry into the domestic scooterisation trend. Its expanding electric vehicle portfolio, strong export franchise and wholly owned captive financing arm offer additional avenues for growth beyond the domestic motorcycle business.
Although higher raw material costs may put pressure on margins in Q2FY27, sustained product premiumisation and operating leverage are expected to support EBITDA margins at around 20% over the medium term.
Key risks for the firm are rising raw material costs, intensifying competition and subdued volume growth.
Bajaj Auto's valuation
Systematix values Bajaj Auto’s core business at 26 times its estimated FY28 earnings per share (EPS), arriving at a valuation of Rs 11,451 per share. It additionally factors in Rs 194 per share for investments in PI Industries and KTM, Rs 93 per share for Bajaj Auto Credit, and net cash worth Rs 688 per share. A 20% holding company discount is applied wherever applicable.
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