Motilal Oswal's research report on Bajaj Auto
Bajaj Auto’s (BJAUT) 4QFY26 earnings at INR27.2b were in line with our estimate. Favorable currency, price hikes, and an improved mix helped offset cost headwinds and maintain margins QoQ at 20.8% (in line). While BJAUT has been able to post healthy performance in this adverse macro thus far, there are multiple headwinds to navigate. Export demand remains healthy, though the outlook remains uncertain, given the geopolitical issues. Even in the domestic market, while BJAUT is likely to outperform the motorcycle industry on the back of its new launches, growth is likely to moderate in FY27E. Further, a sharp surge in input costs is likely to limit margin upside. Overall, we factor in BJAUT to post 15%/15%/14% CAGR in revenue/EBIDTA/PAT over FY26-28E. At 25.4x/22.2x FY27E/FY28E EPS, the stock appears fairly valued. We reiterate a Neutral rating with a TP of INR9,965, based on 22x FY28E core EPS.
Outlook
We factor in BJAUT to post 15%/15%/14% CAGR in revenue/EBIDTA/PAT over FY26-28E. At 25.4x/22.2x FY27E/FY28E EPS, the stock appears fairly valued. We reiterate a Neutral rating with a TP of INR9,965, based on 22x FY28E core EPS.
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Bajaj Auto_07052026_Motilal Oswal