Bajaj Auto, a leading Indian two and three-wheeler manufacturer, reported a robust first-quarter performance, leading to a wide range of share price targets from domestic and international brokerages. Despite a significant rise in input costs, the company maintained strong margins, showcasing resilient operational execution.
Q1 Financial Highlights and Operational Strength
For the first quarter, Bajaj Auto registered a 37% year-on-year (YoY) increase in revenue, driven by a 29% YoY growth in sales volumes and a 2.8% sequential rise in average selling prices. The company's EBITDA remained stable quarter-on-quarter at 20.9%, effectively offsetting a 100 basis point gross-margin drop through lower other expenses. Emkay Global highlighted the company's strong demand outlook for Q2 and FY27 across both domestic and export markets, despite a volatile global environment. Bajaj Auto managed a 4.5% hit from commodity inflation in Q1 through calibrated pricing actions and tight cost controls.
Analyst Ratings and Target Prices
Post-Q1 results, analysts offered a mix of recommendations. Goldman Sachs, Bernstein, and Nomura issued 'Buy' or 'Outperform' ratings. HSBC, Jefferies, and BNP Paribas opted for 'Hold' or 'Neutral', while UBS, Citi, and Morgan Stanley assigned 'Sell' or 'Underweight' ratings. Across 21 analysts, the consensus target price for Bajaj Auto stock is Rs 11,324, suggesting an 8.8% upside from its current market price.
Foreign Brokerage Outlook
- Investec: Highest target at Rs 13,185.
- Nomura: Rs 12,220.
- CLSA: Rs 12,068.
- Goldman Sachs: Rs 12,000.
- HSBC: Rs 11,700.
- Jefferies: Rs 11,500.
- Bernstein: Rs 11,500, noting Bajaj's performance was execution-driven, unlike peers benefiting from policy.
- Macquarie: Rs 10,900.
- BNP Paribas: Rs 10,600.
- Citi: Rs 10,000.
- UBS: Rs 9,530.
- Morgan Stanley: Lowest target at Rs 9,259.
Domestic Brokerage Targets
- Nirmal Bang: Highest domestic target at Rs 12,941.
- ICICI Securities: Rs 12,650.
- Antique Stock Broking: Rs 12,275.
- IIFL Securities & Choice Broking: Rs 12,000 each.
- MOFSL: Upgraded to 'BUY' with a revised target of Rs 12,096, citing healthy export outlook and strong EV performance.
- Ambit Capital: Rs 10,190.
- JM Financial: Lowest domestic target at Rs 9,850.
MOFSL also noted Bajaj Auto's continued outperformance in both two-wheeler and three-wheeler electric vehicles, along with management targeting 250,000 units of exports per month in Q2. Given strong earnings forecasts, healthy return ratios, and attractive valuations, MOFSL upgraded its rating on the stock.