Accumulate Bajaj Auto: Prayesh Jain

Prayesh Jain of IIFL told CNBC-TV18, "We don’t see Bajaj Auto re-rating considerably from the current levels. If you look at all the aspects of the business, let us look at the domestic two wheeler business, we split it up into motorcycles and scooters. Scooters it does not have a presence. Motorcycles it has been doing badly over the last many months. It is just this month that they have delivered decent performance. We will have to see whether that can be sustained over the near future. The three wheeler business has been doing well."

"In terms of exports, if you look at the motorcycles business, there is increasing competition that is coming in from the Indian plays itself like TVS Motor Company and Hero Motocorp in the key strength areas of Bajaj Auto. Even in the three wheeler export market, TVS Motor is gaining market share in the key markets of Bajaj Auto," he said.

"Talking about profitability, we believe that sustaining that 20 percent EBITDA margin mark would be difficult given that to gain some market share in the domestic they will have to increase the sales promotion expenses which might bring down the margins. Overall we feel that the upside trigger seems to be non-existing for Bajaj Auto. Hence we have accumulate rating on the stock."