Bajaj Auto Ltd. share price target

APAT stood at Rs 2216 crore (against estimate of Rs 2228 crore) on a 21.8% growth in revenue and 40 bps expansion in EBITDA margin on y-o-y basis.

We met with the management of Bajaj Auto (BJAUT) to get an update on the different segments of the business. The management anticipates a 7-8% volume growth in the domestic 2W industry in FY25.

We reiterate our BUY call on Bajaj Auto Limited (BAL), as it has been registering healthy volume growth though export is yet to recover fully.

However, at the CMP, the valuation appears full (stock is currently trading at 24.7x 12MF consensus P/E), and as a result, we maintain our HOLD rating on the stock.

BJAUT’s 1QFY25 performance was in line with our estimates. Margins remained stable QoQ, despite EV ramp-up, due to PLI accrual and favorable forex.

BJAUT reported a steady Q1 (revenue/EBITDA up 16%/24% YoY; 20.2%
EBITDA margin, aided by 50bps accrual of PLI benefit). Domestic 2W prospects
are healthy, though BJAUT’s position has slipped now (also in the 125cc
motorcycle); response to newly-launched CNG motorcycle needs to be watched.

BJAUT's Q1FY25 revenue jumped 16% YoY (4% QoQ) to Rs 119bn aided by volume growth of 7% and favourable mix aiding faster growth