Neutral Bajaj Auto; target of Rs 9070: Motilal Oswal

Motilal Oswal's research report on Bajaj Auto

Bajaj Auto’s (BJAUT) 2QFY26 earnings at INR24.8b were broadly in line with our estimate. While margins were 50bp ahead of expectations at 20.5%, led by an improved mix and favorable currency, lower other income limited earnings upside. While a recovery in exports and a healthy ramp-up of Chetak and 3Ws are key positives, market share losses in domestic motorcycles, particularly in its crucial 125cc+ segment, remains the key concern. While BJAUT has acquired a controlling stake in KTM under a lucrative deal, its effectiveness depends on how quickly it is able to turn around its operations, which will remain the key monitorable going forward. At ~25.7x/23.5x FY26E/27E EPS, BJAUT appears fairly valued. We reiterate our Neutral rating with a TP of INR9,070, based on 24x Sep27E core EPS.

Outlook

Which will remain a key monitorable moving forward. At ~25.7x/23.5x FY26E/27E EPS, BJAUT appears fairly valued. We reiterate a Neutral rating with a TP of INR9,070, based on 24x Sep27E core EPS.