Emkay's research report on Bajaj Auto
BJAUT reported strong performance that was in-line, with margins sustaining QoQ at 20.1% (Emkay est.: 20.4%). Domestic 2W recovery continues apace, even as revival in exports is expected to be slightly gradual. BJAUT is improving its positioning in the growing 125cc category, while also ramping-up well in E3Ws (already has 60% share in some markets). However, amid the sharp runup in the stock price (valuations well above 1SD from LTA),
Outlook
we retain REDUCE,with revised TP of Rs7,900/share (23x core FY26E multiple + Rs800 cash/investment per share; upward revision on healthy positioning in E-3Ws, thereby restricting disruption threat to the high-margin 3W franchise. We buildin 12%/8% volume/EPS CAGR over FY24-26E. We still prefer TVSL in 2Ws (similar business model with bottom-up share gains, margin triggers).
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