Bajaj Auto shares swing 4% from day's low after Q1; Should you buy, sell or hold?

Bajaj Auto shares are down 7 percent since the beginning of the year.

Shares of Bajaj Auto swung between losses and gains on August 7, falling as much as 4 percent in early trade before recovering to trade in the green. This comes after the company posted a 14 percent year-on-year rise in consolidated net profit to Rs 2,210.44 crore for the first quarter of FY26, with revenue from operations up 10 percent at Rs 13,133.35 crore.

The company sold 11.11 lakh units in Q1 FY26, up 1 percent from 11.02 lakh units in the same period last year. Domestic sales declined 8 percent on-year to 6.35 lakh units, while exports grew 16 percent to 4.76 lakh units, with two-wheeler exports rising 14 percent and CV exports surging 32 percent.

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Bernstein has maintained an Outperform rating on Bajaj Auto with a target price of Rs 11,000 per share. This implies an upside potential of 34.5 percent from the last close. The brokerage said the first-quarter results reaffirm the company’s positioning as a stable business, offering strong downside protection amid a volatile demand environment. Bajaj Auto continues to deliver consistent performance, thanks to its balanced business model. The company is effectively leveraging a multi-powertrain portfolio, robust export markets, and a growing premium segment to counter softness in domestic demand.

CLSA also has an Outperform rating on the stock but has trimmed its target price to Rs 9,971 per share. Export volumes are showing signs of recovery, with management highlighting that growth is being led by the Latin American (LATAM) and ASEAN markets. CLSA forecasts a 10 percent year-on-year growth in two-wheeler export volumes, slightly below the company’s FY26 guidance of 15–20 percent. Bajaj Auto aims to boost market share through refreshed models, new launches, and strategic pricing, while continuing to focus on profitability.

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The company slashed production of its electric two-wheelers by up to 50 percent in July as a deepening global shortage of heavy rare earth magnets disrupts supply chains. The automaker expects output to remain constrained in the coming months, with August and September also likely to see production at just over half the planned levels, Bajaj Auto said in its post-earnings conference call on August 6.

The supply crunch stems from China's suspension of magnet exports since April. As the dominant player in the rare earth space—accounting for 60 percent of global production and 90 percent of refining—China’s pause has sent shockwaves through the auto industry, particularly electric vehicle (EV) manufacturers that rely heavily on these components.

The company is now exploring two parallel tracks: replacing heavy rare earth magnets with more easily available light rare earth variants and developing entirely new technologies that bypass rare earths altogether.

Shares of the company were trading at Rs 8,202, up 0.3 percent from the last close on the NSE. Bajaj Auto shares are down 7 percent since the beginning of the year.

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