Hold Bajaj Auto; target of Rs 4100: ICICI Direct

ICICI Direct's research report on Bajaj Auto

Bajaj Auto (BAL) is second largest motorcycle manufacturer and largest 3-W OEM domestically (FY22 market share at 18.2%, 61.5% respectively). Exports comprised ~58% of FY22 volumes; 2-W:3-W mix at ~89:11 (overall) • Strong b/s with ~Rs 15,000 crore cash on books (Dec’22 end), history of ~20% return ratios & one of the highest dividend yields among Nifty stocks.

Outlook

We maintain HOLD rating on BAL following slower pace of volume recovery in export markets and gradual inching up the play in EV domain by the company with captive electric-3-W launch expected in March 2023. Introducing FY25E, we now value BAL at Rs 4,100 on SOTP basis (15x PE on FY24-25E average EPS, stake in PMAG; earlier TP: Rs 3,910).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Bajaj Auto - 27 -01-2023 - ic