Nomura has retained its ‘Neutral’ rating on Bajaj Auto with a target price of ₹9,413 after the company announced a significant strategic investment of EUR 800 million (approx. ₹7,200 crore) into KTM AG, its long-time European partner.
The investment will be routed through BAIHBV, a wholly owned subsidiary of Bajaj Auto, and is intended to give Bajaj controlling ownership in KTM, subject to necessary regulatory approvals.
Nomura stated that while this move could strengthen Bajaj Auto’s global premium motorcycle portfolio and deepen its technological capabilities, it introduces near-term risks. These include regulatory hurdles, integration complexity, and margin pressure from an overseas business that operates in a more competitive environment.
The brokerage sees long-term strategic upside in the deal, particularly from supply chain synergies, enhanced global distribution, and scale benefits in R&D. However, until there is more clarity on the post-acquisition structure, financial impact, and execution plan, Nomura remains cautious in the near term.
Disclaimer: This article is based on the brokerage report by Nomura. It does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
