CLSA has upgraded Bajaj Auto from Underweight to Overweight, setting a target price of ₹9,493, indicating a 10% upside from the current market price of ₹8,644.00.
Key Insights:
- Improving franchise: Bajaj Auto benefits from its focus on the electric two-wheeler (e-2 wheeler) segment, supported by a steep correction in the stock price.
- Valuation: Trading at 21x FY27CY earnings, slightly higher than the long-term average of 19x.
- Margins: Despite scaling up, the company has maintained a 20% margin, showcasing strong operational efficiency.
- Premium multiples: Expected to command a 10-20% premium over long-term averages moving forward.
- Market strategy: Efforts are underway to convert 100cc model buyers to 125cc models, enhancing profitability.
CLSA remains optimistic about Bajaj Auto’s growth trajectory, supported by its strategy and robust execution.
Disclaimer: This content is for informational purposes only. Please consult your financial advisor before making investment decisions.
