Bajaj Auto - Volume Growth To Moderate In The Domestic Market: Motilal Oswal

Motilal Oswal Report

After outperforming in FY24, we anticipate that Bajaj Auto Ltd.’s growth rate (similar to other listed mass market peers) will moderate in FY25 as Honda Motorcycle and Scooter India, Pvt. Ltd. recovers back its lost share last year. Hence, we expect Bajaj Auto to post a 5% growth in domestic motorcycles in FY25E and a 10% growth in FY26E.

Similarly, in exports, we expect Bajaj Auto to post a 7% growth in FY25E and exhibit a strong recovery with 20% growth in FY26E.

Bajaj Auto has witnessed a significant re-rating in the last 12 months, aided by market share gains in the 125cc+ domestic motorcycles segment, improved margins, and a one-of-a-kind policy to reward its shareholders.

We have lowered the FY25 earnings by 6% to reflect weak performance at KTM in FY25E. At 39 times/31 times FY25/FY26E consolidated EPS, the stock’s valuation fairly reflects the positives from here on.

We reiterate our Neutral rating with a revised target price of Rs 10,705 as we roll forward to Sep-26E consolidated EPS (valued at 25 times Sept 2026 EPS).

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