Anand Rathi's research report on Bajaj Auto
Broadly in line with our estimate, Bajaj Auto’s Q3 standalone EBITDA grew 6% y/y to Rs25.8bn. Our positive stance on the company is backed by 1) expectations of cyclical upturns in 2Ws (domestic/ exports); 2) its vigorous EV strategy and 3) margin expansion from rising economies of scale and cost-cutting measures. We expect strong 12/15/17/17% volume/revenue/EBITDA/core PAT growth over FY25-27, driven by an upturn in domestic/export markets and new products in CNG 2Ws, EVs and the Triumph range.
Outlook
We retain a Buy with a lower sum-of-parts TP of Rs10,000 (earlier Rs14,000), based on 25x FY27e core EPS (Rs360) at Rs9,100/sh, Investment in Pierer Mobility/KTM at Rs59/sh (based on a 20% discount to the MCap), Bajaj Auto Credit at Rs124/sh (1.5x P/B FY26e, BV Rs23bn) and cash/shares at Rs708 each.
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