Buy Bajaj Auto; target of Rs 11,160: Asit C Mehta

Asit C Mehta is bullish on Bajaj Auto has recommended buy rating on the stock with a target price of Rs 11,160 in its research report dated June 10 2024.

Broker Research

June 10, 2024 / 14:51 IST

Buy

26 Aug, 2025 12:21

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Asit C Mehta report on Bajaj Auto

We value the standalone business at 30x FY26E EPS of Rs 367.6 and add Rs 127 for the stake held in Pierer Mobility AG. We are positive on the company as we expect volume growth across all its business units, along with continuity in healthy margin delivery and FCF generation. We like 1) Its resilient business model with segmental and geographic diversification. 2) Better than industry growth in domestic 2Ws, aided by mix improvement in favour of 125cc+ segments. 3) Gradual growth in exports, which are significantly below their pre-COVID19 peak levels. 4) Beneficiary of transition from ICE 3Ws to CNG 3Ws and e-autos. 5) Margins to strengthen further owing to premiumisation in domestic 2Ws and 3Ws, operating leverage and cost rationalisation. 6) Healthy FCF generation and dividend payout/ buybacks to benefit shareholders. We expect Revenue/EBITDA/PAT to expand at CAGR of 15.0%/18.7%/17.1%, respectively, over FY24–FY26E.

Outlook

We initiate coverage on Bajaj Auto Ltd. (BJAUT) with a “BUY” recommendation and a target price of Rs 11,160 based on SOTP valuation.

For all recommendations report, click here