Emkay Global Financial's research report on Bajaj Auto
BJAUT reported a slight miss on margins in Q1 (down ~30bps QoQ to 19% vs our estimate of 19.4%), owing to normalizing mix; PAT was largely in-line. On the demand front, while exports are expected to improve sequentially, the pace of uptick is seen to be gradual. We believe the recent Triumph launch, while positive, will not move the needle much for BJAUT, even as the weakening domestic ICE-2W franchise and disruptive risk to the 3W space (from EVs) remain structural concerns.
Outlook
This compels us to maintain our HOLD rating on the stock, even as we upgrade FY24E/FY25E EPS by 11.6%/9.7% to largely reflect the Q1 margin run-rate (also introduce FY26E). Our revised target price stands at Rs4,760/share (15x core FY25E EPS and Rs924 cash/investment per share).
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