Buy Bajaj Auto, target price Rs 12,483: Choice Equity Broking

Choice Equity Broking Private Ltd has a buy call on Bajaj Auto with a target price of Rs 12483. The current market price of Bajaj Auto is Rs 10063.1. Bajaj Auto, incorporated in 2007, is a largecap company with a market cap of Rs 280965.11 crore, operating in Auto sector.

Bajaj Auto Ltd. key products/revenue segments include Automobile - 2 & 3 Wheelers, Export Incentives, Other Operating Revenue, Royalty Income and Scrap for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 13646.61 crore, up 11.24% from last quarter's Total Income of Rs 12267.39 crore and up 21.77% from last year same quarter Total Income of Rs 11206.84 crore. The company has reported net profit after tax of Rs 1965.74 crore in latest quarter.

Investment Rationale
Choice Equity Broking remains optimistic about Bajaj Auto?s growth trajectory in the medium to long term, supported by several key factors: 1) a growing focus on exports to drive sales; 2) increasing demand for the 125cc 2-wheeler ?Freedom?; 3) strong demand for the 2-Wheeler EV ?Chetak?; and 4) an aggressive marketing push for CNG-based 2-wheelers and electric variants. 5) With the rising contribution of premium products like Triumph, solid growth in the EV portfolio (2W+3W), and improving profitability from ?Chetak,? we maintain our BUY rating on the stock. We value the stock using an SOTP-based methodology, arriving at a target price of Rs. 12,483 (30x Sep-FY27E core EPS + KTM stake + cash).

Promoter/FII Holdings
Promoters held 55.06 per cent stake in the company as of 30-Jun-2024, while FIIs owned 14.19 per cent, DIIs 8.73 per cent.