Bajaj Auto shares: Export recovery, ramp-up of Chetak, 3Ws key positives; should you buy?

Motilal Oswal Financial Services (MOFSL) retained its 'Neutral' rating on Bajaj Auto, citing a balance between improving export momentum and electric vehicle traction on one hand, and persistent market share loss in domestic motorcycles and execution risks around the KTM turnaround on the other. The brokerage said the stock appeared fairly valued at current multiples, limiting near-term upside.

Following a management interaction, MOFSL said Bajaj Auto’s recovery in exports, improving EV economics and potential synergy benefits from the KTM acquisition are key positives. However, these are offset by continued weakness in domestic motorcycles, particularly in the crucial 125cc-plus segment, where the company had ceded share to peers. MOFSL said the success of planned launches would be critical to reversing this trend.

It suggested a target price of Rs 9,070 on Bajaj Auto, based on 24 times September 2027E core EPS.

MOFSL said the Bajaj Auto management aimed to regain lost domestic motorcycle share through multiple launches, including a new 125cc commuter motorcycle expected in FY27E, three Pulsar variants slated for December 2025, March 2026 and May 2026, interventions in the Dominar brand, a 350cc Triumph variant and recently launched KTM models such as Adventure, Super Moto and Duke 160. The brokerage said it modelled a 6.5 per cent volume CAGR over FY25–27E, but noted that execution would be key given intense competition in the mass and premium segments.

On exports, MOFSL said demand momentum was likely to sustain, supported by healthy growth in Latin America and Asia. Bajaj Auto had recently crossed 200,000 units per month in exports after 40 months, despite Nigeria operating at less than 50 per cent of peak volumes. Latin America had emerged as the company’s largest export market, with management remaining upbeat on ramp-ups in Brazil and Mexico. MOFSL added that recent currency depreciation was likely to provide a margin cushion in the coming quarters.

In electric vehicles, MOFSL said Bajaj Auto had emerged as the second-largest player in the two-wheeler EV segment on the back of strong Chetak demand and was close to achieving Ebitda break-even, a key differentiator versus peers. The brokerage said another Chetak launch next year could help Bajaj Auto target leadership in the segment. In three-wheelers, the recent launch of the electric rickshaw Riki was expected to support growth.

MOFSL also highlighted potential long-term benefits from the KTM acquisition but flagged near-term uncertainty. The brokerage said management planned to restructure KTM’s core operations, exit non-core businesses such as bicycles and cars, and focus on KTM and Husqvarna. CY26 was expected to be a year of consolidation, with operational benefits likely to be visible only from the second half, making the turnaround a key monitorable.

MOFSL said it modelled a revenue, Ebitda and PAT CAGR of 12 per cent, 12 per cent and 11 per cent, respectively. At around 24.1 times FY27E and 21.9 times FY28E earnings, the brokerage said Bajaj Auto was fairly valued.