The international brokerage has a ‘Buy’ recommendation on Bharti Airtel and Bajaj Auto. The telecom company is expected to get a boost from the Tata Play deal. In the automobile sector, CLSA chose Bajaj Auto on the basis of its growth outlook for conventional two-wheelers with Internal Combustion Engines.
CLSA bets on Bajaj Auto’s domestic two-wheeler volume
Bajaj Auto estimates that the ICE (internal combustion engine) two-wheeler domestic industry is likely to grow in a range of 6-8% for FY26, while 125cc+ motorcycles’ growth is expected to outperform relatively. Taking this into account, it will continue to focus on the 125cc+ segment. This can translate into a double-digit revenue growth.
“We are building in 6%/10% domestic 2W volume/revenue growth for Bajaj Auto in FY26, as we believe revival in rural markets would not aid Bajaj Auto much amidst Honda Shine adding on to competition,” said CLSA. The brokerage house has an ‘Outperform’ rating on the stock with a target price of Rs 9,473. Also, Bajaj Auto’s export volumes are picking up as inflation in African markets, which is a key market zone, is getting back on track. “We are building in 10% export volumes growth for FY26,” said CLSA.
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Coming to the other pick, Bharti Airtel. The brokerage has maintained its Outperform rating on the stock with a target price of Rs 1,641.40. The company is likely to benefit from the deal with Tata Play for the direct-to-home (DTH) business. This deal will help the company penetrate high-end homes and boost converged offerings.
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“We believe the Tata Play deal, should it happen, would be a significant positive for Bharti’s homes business, as it will multiply access to high-end homes to combined 45m and also boost converged offerings,” said CLSA. Plus, CLSA is betting on the untapped broadband market. “India’s BB penetration is among the lowest worldwide, with only 41m of 300m households with BB, so there is a large market opportunity,” stated the CLSA report.
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