Buy Bajaj Auto, target price Rs 4500: Axis Securities

Axis Securities has buy call on Bajaj Auto with a target price of Rs 4500. The current market price of Bajaj Auto Ltd. is Rs 3327.6.

Time period given by analyst is one year when Bajaj Auto Ltd. price can reach defined target.

Bajaj Auto Ltd., incorporated in the year 2007, is a Large Cap company (having a market cap of Rs 96257.94 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-2021.


Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 9080.50 Crore, up 17.69 % from last quarter Total Income of Rs 7715.34 Crore and up 22.02 % from last year same quarter Total Income of Rs 7441.66 Crore. Company reported net profit after tax of Rs 1774.60 Crore in latest quarter.

Investment Rationale
Bajaj Auto is well-placed to capitalize on demand normalization and premiumization trends in the 2W industry which should support profitability and operational performance going forward. Moreover, the brokerage expects the company to gain further market share in exports, driven by its market leadership position, brand equity, and enhanced distribution network. Bajaj Auto remains preferred pick in the 2W segment given reasonable valuations and strong medium-term growth prospects. It maintains BUY rating on the stock and value it at 17x FY24E EPS to arrive at a TP of Rs 4,500.

Promoter/FII Holdings
Promoters held 53.7 per cent stake in the company as of 30-Sep-2021, while FIIs owned 11.21 per cent, DIIs 12.85 per cent.