Accumulate Bajaj Auto; target of Rs 2597: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital`s research report on Bajaj Auto“Bajaj Auto reported numbers above our expectations on the operational front mainly on account of higher realisations due to better product profile and better operational efficiencies; however an exceptional expense to the tune of Rs 3.4bn affected the net profits of the company. We believe that worst seems to be over for the company, with demand revival on track with the onset of festive season. We believe the domestic 2-wheeler market which has started growing from the onset of festive season, would continue to grow here onwards for next couple of years. We expect double digit growth for the two wheelers to start from FY16 onwards. We believe Bajaj’s aggressive product linup, specifically the premium class of bikes would enable it to maintain growth as well as manage its higher margins vis-à-vis competitors. Discover which had seen subdued demand in the last couple of quarters is back on track with the launch of the New Discover 150 in Aug-Sept 2014.” “We believe, with the launch of new discover & with managements renewed focus on gaining back the market share, coupled with growing exports & a strong continued growth in the Pulsar brand of bikes & with strong three wheeler numbers, Bajaj auto is certainly on its way back to attain better volumes in H2 of current year as well as whole of FY16. Bajaj Auto delivered a decent performance at both Revenues & operational levels on the back of better demand scenario, higher exports, better product mix & stellar performance of its 3-wheeler business. The onset of festive season in the quarter added the much required fizz in the volumes & the launch of new Discover 150 seemed to give a new lease of life to the dwindling Discover brand. Revenues were up both QoQ as well as YoY at Rs 59.63 bn on the back of higher volumes in the quarter, up by 9.8% YoY & 6.8% QoQ. Higher exports & better three wheeler contributions was one of the major reason behind better realizations & a saving grace for margins. Realizations improved by 6.3% QoQ & 4.8% YoY. Exports contributed ~45% to the total revenues, which somehow helped the company sail through the moderate demand in the domestic markets.” “At the current Price, Bajaj Auto is trading at a PE of 21.4xFY15E & 15.5xFY16E, with best in segment margins & expectations of a better H2FY15, We maintain our Accumulate rating on the stock with a price target of Rs 2597,” says Dolat Capital research report.

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