Buy Bajaj Auto; target of Rs 10,138: LKP Research

LKP Research's research report on Bajaj Auto

Bajaj Auto Limited (BAL) reported strong volume performance in Q4 FY24 despite exports markets not yet out of the woods completely, but showed signs of recovery. The numbers were overall below the Q3 FY24 levels on seasonality. Topline growth was up 29.5% yoy and down by 5.5% qoq as volumes in the domestic markets were quite strong at 28% yoy on low base of last year and demand uptick seen in 2W industry this fiscal. The total volumes in the quarter were up 24% yoy but down by 10.7% qoq, while the realizations grew by 3.6% yoy and 5.8% qoq. During the quarter, domestic motorcycles grew by 32% yoy . The strong yoy surge was due to various launches in the >125cc and Pulsar N Series launches in the premium segments in the domestic markets and Triumph & KTM sales ramp up.

Outlook

We therefore maintain our BUY rating on the stock with a higher target price of ₹10,138 (valued at 23x FY26E earnings).