Bajaj Auto shares gain on record Q1 exports, split analyst views
A record export performance drove a 65% revenue surge for Bajaj Auto, but shrinking domestic market share divides analysts on the stock's future trajectory.
Bajaj Auto shares climbed more than 2% after the manufacturer posted a 46% jump in consolidated net profit to Rs 3,226 crore for the first quarter. Revenue from operations surged 65% year-on-year to Rs 21,689 crore, driven by record quarterly volumes and improved realisations.
The company shipped 12.22 lakh units in the quarter, a 29% increase from the same period last year. Exports delivered the standout performance, surpassing 700,000 units for the first time to mark the strongest quarter in the company's history. Commercial vehicle volumes also outpaced the broader business, rising 33% to 2.15 lakh units.
Motilal Oswal upgraded the stock to "Buy" from "Neutral" and set a target price of Rs 12,096, implying a 16% upside. The brokerage highlighted that Bajaj Auto sustained robust margins despite rising input costs. It raised earnings per share estimates by 5% for fiscal 2027 and 9% for fiscal 2028, projecting revenue, EBITDA and profit after tax compound annual growth rates of 20%, 22% and 22% over the FY26–FY28 period.
JM Financial offered a starkly different assessment, maintaining its "Reduce" rating with a target price of Rs 9,850 that suggests a 5.3% downside. The brokerage pointed to a continued erosion in domestic market share, which slipped to 10.5% in the first quarter from 10.8% in the previous quarter and 12.1% in January 2024. It argued that the company lacks meaningful traction outside its core Pulsar franchise, limiting the impact of new product launches on overall market share.
Outlook hinges on global versus domestic balance
The divergent analyst views underscore a critical inflection point for investors. While both brokerages acknowledged the strength of overseas demand in Africa and Latin America—prompting JM Financial to raise its fiscal 2027 volume growth estimate to around 14%—the stock's premium hinges on whether exports can offset domestic stagnation. Management is targeting exports of more than 250,000 units per month in the second quarter.
Moving forward, margin direction will depend on the interplay between raw material inflation, new launch costs, internal cost optimisation and favourable currency movements. Broad-based growth across internal combustion engine and electric vehicle segments provides some buffer, but the domestic market share trajectory remains the key metric for the stock to re-rate further.
