Bajaj Auto upgraded to ‘overweight’ by CLSA, stock up 3%

Global brokerage firm CLSA has upgraded Bajaj Auto’s stock rating to ‘Overweight’ from ‘Underweight’ and set a target price of Rs 9,493. Following the upgrade, the stock surged 3%, reaching a high of Rs 8,898.80 on January 9.

This upgrade comes after a steep correction in the stock price and reflects improving prospects for the company, particularly in the electric two-wheeler (e-2 wheeler) segment.

CLSA notes that Bajaj Auto is currently trading at 21 times its FY27CY (fiscal year 2027 calendar year) earnings, compared to its long-term average of 19 times. While this suggests a slight premium, CLSA believes the company deserves a 10-20% premium multiple moving forward, given its growth potential.


A key factor supporting this positive outlook is Bajaj Auto's ability to maintain a healthy margin of 20% despite scaling up its operations. This demonstrates the company's efficient cost management and strong pricing power.

CLSA also highlights Bajaj Auto's focus on converting buyers of 100cc motorcycles to higher-margin 125cc models.

The brokerage firm's upgrade is also influenced by the improving e-2 wheeler franchise, suggesting that Bajaj Auto may be well-positioned to capitalize on the growing demand for electric vehicles.

Also read: TCS Q3 Results FY25 Live Updates: TCS Q3 revenue projected to grow 6.4% YoY to Rs 64,500 crore; key focus areas to watch

Bajaj Auto share price history

Shares of Bajaj Auto have gained 25.15% in the last year but have fallen by approximately 7% in the last 6 months. In the last 3 months and 1 month, the stock has declined by 24.9% and 2.1% respectively.

Technical performance of Bajaj Auto shares

On charts, Bajaj Auto shares are placed only above their 10-day exponential moving average (DEMA), but below the 20, 50, 100, and 200 DEMA. The stock is currently oscillating near the 37 mark on the RSI, which is a mid-range level on the indicator.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)