Accumulate Bajaj Auto; target of Rs 9900: KR Choksey

Accumulate

KR Choksey's research report on Bajaj Auto

For Q3FY25, revenue rose 8.2% YoY (-0.6% QoQ) to INR 131,689 Mn, largely in line with our estimate. The growth was driven by a 2.0% YoY increase in volumes to 1,224,472 units and a 4.7% YoY improvement in average realization. EBITDA increased by 13.9% YoY (+3.7% QoQ) to INR 27,508 Mn, missing our estimates by 2.4%. Net profit increased by 8.0% YoY to INR 21,957 Mn, missing our estimates, mainly due higher than estimated depreciation and interest expenses. We lower our FY26E/FY27E Adj. EPS estimates by 6.1%/5.7%, respectively, due to weaker-than-expected Q3FY25 performance, a delay in 2W-CNG adoption, intense competition in the 2W segment, and an uncertain global macroeconomic outlook. We forecast Revenue/EBITDA/Adj. PAT to grow at a 17.0%/19.0%/16.3% CAGR over FY24-27E. Bajaj Auto is trading at 27.9x/23.7x FY26E/FY27E EPS.

Outlook

We roll over our valuation to FY27E, assigning a P/E multiple of 23x on FY27E EPS of INR 434.2 (previously INR 460.2), resulting in a target price of INR 9,900 (previously INR 11,446). Subsequently, we maintain our ‘ACCUMULATE’ rating on the shares of Bajaj Auto Ltd.

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Bajaj Auto - 30012025 - kr