Motilal Oswal's research report on Bajaj Auto
Bajaj Auto (BJAUT) reported better-than-estimated EBITDA margin of 19.3% (nine-quarter high) driven by better product mix. However, we do not expect any material margin expansion in the coming quarters as this largely reflects the benefits of Fx and improved mix. Over the next two quarters, BJAUT has three catalysts for growth: a) Chetak EV ramp-up to 10k/month from Jun’23, b) Triumph product launch, and c) potential recovery in exports.
Outlook
We raise our FY24E/FY25E EPS by 7%/8% to factor in a sustained recovery in domestic 2W/3W volumes and better product mix. We reiterate our Neutral rating with a TP of INR4,400 (based on 16x Mar’25E Consol. EPS).
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