Bajaj Auto hits 52-week high as brokerages hike targets

Bajaj Auto shares rose 3% to ₹11,333 on Thursday, marking a 52-week high for the second consecutive session. The stock has rallied significantly over the past two days, gaining 5.7% in the prior session despite broadly weak market sentiment. This momentum reversed an initial 1% decline that followed the April-June earnings release on July 21.

The sharp upward reversal reflects confidence in the company’s operational leverage and geographic reach. Revenue from operations surged 37% year-on-year to ₹17,243.72 crore, fueled by record quarterly volumes and improved realisations. Total sales hit 14,38,251 units, a 29% increase, driven primarily by a 54% jump in exports that more than compensated for an 11% rise in domestic shipments.

Major domestic brokerages responded to the print by revising their valuation models upward. Motilal Oswal Financial Services upgraded the stock to "buy" from "neutral" and set a target price of ₹12,096. The firm cited an anticipated gradual recovery in domestic motorcycle market share, supported by a healthy upcoming product launch pipeline.

Emkay Global Financial Services maintained its "buy" rating but lifted its target price to ₹13,700 from ₹13,000. The firm based its revised target on 26 times its estimated core earnings per share for June 2028. Factoring in a strong demand outlook and resilient margins, Emkay projected volume, revenue, and EPS compound annual growth rates of 12%, 15%, and 16%, respectively, over the fiscal 2026 to 2029 period. ICICI Securities also kept its "buy" call, raising its target to ₹12,650 from ₹12,000.

From a technical standpoint, the rally has pushed key indicators into territory that typically warrants caution. Vipin Kumar, AVP-Research at Globe Capital Market, noted the stock is forming higher highs and higher lows while holding above key moving averages. "The current chart structure points toward further upside, targeting the ₹12,200– ₹12,300 spot range (its previous all-time high). Any dip down to the ₹10,400– ₹10,700 spot zone should be considered a fresh buying opportunity. Hence, we suggest investors hold existing long positions and wait for some dips to add fresh long positions for a medium to long-term perspective," said Kumar.

Aditya Thukral, Founder and Analyst of AT Research and Risk Managers, highlighted that the 14-day RSI has entered overbought territory, which typically requires a cool-off to attract fresh buying. "Despite the rise having been with very high volumes, we couldn’t rule out sideways price action if a price-wise correction is not seen. It seems the bull trend will continue to remain in force in the stock prices, and investors should hold this stock with ₹9,500 as stop losses, which is the higher low of the rally," said Thukral.

Thukral further advised that "the stock has a mean-reverting nature, and buying on dips around 20-day and 50-day EMA’s or near rising trendline support should be the strategy for fresh entries. At the same time, existing investors should think about booking some profits around ₹11,700 and re-enter on dips."