Reduce Bajaj Auto; target of Rs 8300: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Bajaj Auto with a target price of Rs 8300 in its research report dated July 17, 2024.

Broker Research

July 17, 2024 / 12:19 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Bajaj Auto

BJAUT reported a steady Q1 (revenue/EBITDA up 16%/24% YoY; 20.2% EBITDA margin, aided by 50bps accrual of PLI benefit). Domestic 2W prospects are healthy, though BJAUT’s position has slipped now (also in the 125cc motorcycle); response to newly-launched CNG motorcycle needs to be watched. The mgmt guided for exports recovery to be gradual, and its focus on Triumph is to build brand awareness. Valuations, though, remain expensive (trades near 2SD from LTA, at 28x FY26E PER).

Outlook

We raise FY26E EPS by ~2.6% (higher margin) and introduce FY27 estimates (13% FY24-27E EPS CAGR); we retain REDUCE and revise TP to Rs8,300/sh (roll over core 23x multiple to Jun-26E) + Rs900 cash & investment/sh. We prefer HMCL in 2Ws (link) amid growth/rerating triggers (successful Xtreme 125R launch) and an attractive risk-reward.

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