Bajaj Auto share price’s target raised as brokerages bullish post healthy Q3 earnings

Bajaj Auto posted Q3FY23 EBITDA, 18% above Edelweiss’ estimate due to higher-than-expected commodity benefits, better INR/USD realisation and premiumisation trend. Over the next 12 months, the brokerage house expects significant ramp up in its electric vehicle (EV) volumes as Bajaj Auto looks to set up exclusive retail outlets. Also, the products from Triumph stable will be launched.

“Bajaj Auto remains well-placed to capitalise on bottom-up triggers such as addition of models in the EV family and from Triumph. Premiumisation trend can provide cushion against volume disappointment. Multiple triggers can drive Bajaj Auto’s re-rating: Launch of Triumph models (spied testing), EV volume ramp-up, clarity on KTM/Husqvarna, nw Pulsar platform,” the note stated. On balance, the brokerage house has maintained ‘BUY’ on Bajaj Auto shares with a target price of ₹4,373 apiece (earlier ₹4,183 per share).

“Revenue increased by 3% to ₹93.2 bn, coming in 3% above our estimates on better realizations and spare-part sales. Going forward, we build in 8% volume CAGR over FY23-25E (which is lower than the 11-12% CAGR for peers such as TVSL and EIM), mainly due to higher exposure to overseas markets. Exports is likely to be under pressure in the near term, owing to weak macros, adverse currency movements and USD availability issues in the Africa, South Asia and Latin America regions. In contrast, we expect domestic volumes to grow in double-digits, driven by strong urban demand, better finance availability and favorable base effect,” said the brokerage house Emkay maintained its Hold on the auto stock, with a target price of ₹4,250 per share ( ₹4,050 earlier).

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.