Bajaj Auto’s share price rallied 5% to an intra-day high of Rs 8,807 on January 29. The surge in stock price came after the quarterly results of the third quarter of the current financial year. Following earnings, the brokerage firm Nuvama maintained its rating and target price.
Bajaj Auto: Nuvama expects exports to grow over 20%
The brokerage house, Nuvama Institutional Equities, in a research note, said that the company’s operating profit came better than its estimates due to better pricing, scale, PLI incentives, and cost savings. It has maintained its ‘Buy’ rating on the stock, with a target price of Rs 10,700. It estimates that the company’s exports to grow by more than 20% and domestic sales growth by 6-8% in the next quarter of the current fiscal year.
In the next two years, Bajaj Auto’s two-wheeler volume to grow at a compounded growth rate of 7%. Plus, the brokerage firm said that the company’s management has provided a positive volume outlook for the next 3-6 months.
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The brokerage house, Motilal Oswal Financial Services, has maintained its ‘Neutral’ rating and target price of Rs 8,770. However, it has slightly cut the earnings estimates by 2% for FY25 and FY26 as well. Motilal Oswal sees lost share in the domestic 125 cc+ segment on a year-to-date basis as a key risk. “While exports seem to have revived in the near term, the longer-term outlook remains uncertain given the adverse macro globally,” said Motilal Oswal in a research report. Further, it added that despite a correction in the stock price recently Bajaj Auto appears fairly valued at 25.5 times FY26 earnings per share.
Bajaj Auto: Axis Capital bets on lower credit cost hopes
Taking a contrary view, Axis Capital has maintained its ‘Sell’ rating and cut the target price by 5.6% to Rs 7,550 (Rs 8000 earlier). It is worried that the company’s credit cost has increased to 9.4% in the reporting quarter of FY25 while to 8% sequentially.
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