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Published: January 25, 2024
Updated: January 25, 2024

Bajaj Auto's All-Time High Sparks Investor Interest: Q3 Results Surpass Expectations

Record Surge Ignites Investor Interest

Bajaj Auto witnessed an impressive surge of over 5%, hitting an all-time high of Rs 7,590 on January 25, following its outstanding Q3 performance. The two-wheeler major reported record-breaking revenue and net profit for the third consecutive quarter, closing the session with a remarkable upswing.

Analyst Sentiments Vary

Optimism from Morgan Stanley:

Morgan Stanley holds an 'overweight' outlook on Bajaj Auto, setting a target price of Rs 8,082 per share. Analysts at the firm emphasize a strong October-December quarter, highlighting the positive impact of an improving product mix on gross margin and EBITDA.

Jefferies Bullish on Rebound:

Jefferies presents a 'buy' rating with an ambitious target of Rs 9,000, implying a potential upside of nearly 25%. The brokerage anticipates a robust rebound in Bajaj Auto's two-wheeler segment, projecting a 15% volume CAGR in FY 24-26. The increased focus on electrification, coupled with a significant market share, adds to the positive outlook.

Citi Expresses Caution:

Contrastingly, Citi adopts a cautious stance with a 'sell' rating and a target price of Rs 5,000, suggesting a potential downside of approximately 31%. The brokerage cites high competitive intensity in the motorcycle space and a potentially prolonged export revival as key concerns.

Robust Q3 Performance:

Bajaj Auto's Q3 results showcase a commendable 37% YoY increase in net profit, reaching Rs 2,041.88 crore. This surge is attributed to robust sales, strategic price hikes, and increased realizations amidst consistent demand. The company's focus on premium vehicles contributes to a 30% revenue increase, amounting to Rs 12,113.51 crore in the October-December period.

Analyst Insights and Market Response:

Morgan Stanley's positive evaluation of the quarter reflects the strength of Bajaj Auto's financial performance. Jefferies' optimism about the two-wheeler segment's rebound and focus on electrification aligns with the industry trends. On the other hand, Citi's cautious approach signals concerns about competitive intensity and export challenges.

Make your decision while Navigating through diverse Analyst Views:

While Bajaj Auto's all-time high undoubtedly captures market attention, investors are presented with varied perspectives from leading analysts. The stock's future trajectory may hinge on how the company addresses competition, sustains export growth, and capitalizes on the electrification wave in the Indian automotive industry. Investors are advised to carefully weigh these factors before making decisions in this dynamic market landscape.