Accumulate Bajaj Auto; target of Rs 10,948: KR Choksey

KR Choksey recommended Accumulate rating on Bajaj Auto with a target price of Rs 10,948 in its research report dated July 18, 2024.

Broker Research

July 19, 2024 / 14:27 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

KR Choksey's research report on Bajaj Auto

For Q1FY25, BJAUT’s total volumes continued a strong growth trajectory at +7.3% YoY/ +3.1% QoQ. Revenue for Q1FY25 grew by 14.9% YoY (+2.7% QoQ), which was in line with our estimates. EBITDA at INR 23,704 Mn grew by 22.7% YoY (+3.8% QoQ), which was in line with our estimates. The EBITDA margin of 19.7% grew by 113 bps YoY (+10 bps QoQ), driven by better realization and cost reduction, which more than offset the drag from the growing e2W business. Reported PAT stood at INR 19,418 Mn, up +18.1% YoY due to the cascading effects of operating performance but declined by 3.5% QoQ. The reported PAT was 3.8% lower than our estimate primarily due to higher-than-expected tax rates.

Outlook

We increase our FY25E/FY26E estimates on expectations that the EBITDA margins can inch up due to newly launched products and PLI benefits. Due to the continued strong performance and multiple growth levers in place, we assign a P/E multiple of 29.1x (Previously: 27.8x) on FY26E EPS of INR 376.2 to arrive at a target price of INR 10,948/share (Previously: 10,263). Given the 12.7% upside potential, we are downgrading our rating on the shares of Bajaj Auto from "BUY" to "ACCUMULATE."

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