Motilal Oswal's research report on Bajaj Auto
Domestic demand appears to have slowed down in the first couple of months of FY27, with the Bajaj Auto (BJAUT) management expecting the industry to post 7-9% growth in the near term. However, Chetak has ramped up very well over the last few months, especially post the launch of the affordable C2501 model. Driven by its new launches and enhanced capacity, BJAUT targets a leadership position in 2W EVs going forward. We expect exports to remain a key growth driver even in FY27, as BJAUT continues to experience very strong demand from its key markets like LATAM and ASEAN. Further, the impact of rising input cost pressure is likely to be offset by: 1) price hikes taken in Apr and May’26; and 2) favorable currency.
Outlook
Overall, we expect BJAUT to post a 15%/15%/14% CAGR in revenue/EBITDA/PAT over FY26-28. At 24.6x/21.6x FY27E/FY28E EPS, the stock appears fairly valued. We reiterate our Neutral rating with a TP of INR10,025, based on 22x FY28E core EPS.
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Bajaj Auto - 1506026 - moti