Bajaj Auto share price falls 3% after Q4 results; Should you buy, sell or hold the stock?
- Bajaj Auto Q4 results have been resilient, with robust domestic growth compensating for sluggish exports amidst global challenges, analysts said.
Bajaj Auto share price fell nearly 3% in early trade on Friday after the two-wheeler major reported its earnings for the fourth quarter of FY24. Bajaj Auto shares declined as much as 2.93% to ₹8,753.20 apiece on the BSE.
The two and three-wheeler manufacturer Bajaj Auto reported a net profit of ₹1,936 crore for Q4FY24, a growth of 35.1% from ₹1,433 crore in the ebay-ago quarter.
Bajaj Auto’s revenue from operations in the quarter ended March 2024 increased 29% to ₹11,485 crore from ₹8,904 crore, YoY, aided by strong domestic demand for its motorcycles and steady exports.
At the operational level, EBITDA in Q4FY24 rose 34.4% to ₹2,307 crore from ₹1,716 crore, while EBITDA margin improved by 80 basis points (bps) to 20.1% from 19.3%, YoY.
Analysts believe Bajaj Auto Q4 results have been resilient, with robust domestic growth compensating for sluggish exports amidst global challenges.
“Notably, dynamic P&L management, product mix enhancements, and operational efficiencies have bolstered margins, especially with the successful integration of significant investments in electric scooters. Market share gains in the domestic segment, particularly in the 125cc+ segment, alongside strong export volumes and a surge in EV sales, underscore the company's competitive strength,” said Dhruv Mudaraddi, Research Analyst, StoxBox.
Looking ahead, he believes the company is well-poised to capitalize on capacity expansion and the continued growth of the EV market. Moreover, with the anticipated IPOs of electric vehicle rivals Ola and Ather leading to sector re-rating, Bajaj Auto's valuation multiples are likely to remain elevated, signaling a positive outlook for investors, he added.
Here’s what brokerages have to say on Bajaj Auto Q4 results and Bajaj Auto shares:
Motilal Oswal
Analysts at brokerage firm Motilal Oswal Financial Services expect Bajaj Auto to gain share in domestic motorcycles in FY25, aided by a shift in demand to the 125cc+ segment, which is its strong market; and a healthy launch pipeline.
However, export demand continues to remain uncertain due to geopolitical headwinds. Even three-wheeler ICE demand is likely to normalize over a very high base in the last two years.
“Bajaj Auto has witnessed the most re-rating in the last 12 months on the back of its market share gains in the 125cc+ domestic motorcycles segment, improved margins, and a one-of-a-kind policy to reward its shareholders. After the sharp rally, however, the stock at ~28x/24x FY25E/26E EPS appears fairly valued,” Motilal Oswal said.
The brokerage firm reiterated its ‘Neutral’ rating and Bajaj Auto share price target of ₹8,360 per share, premised on 22x FY26E consol EPS.
JM Financial
While domestic demand remains healthy, export sales are expected to witness a gradual recovery owing to macro headwinds. Margins in the medium term are likely to draw support from favorable mix and higher operating leverage, JM Financial said.
Given the successful track record of product intervention by Bajaj Auto in the last few years, JM Financial remains positive on the stock. It estimates revenue / EPS CAGR of 16% / 19% over FY24-26E.
It maintains a ‘Buy’ rating with a March 2025 Bajaj Auto share price target of ₹9,500 per share.
Choice Broking
Choice Broking remains positive on the growth story of Bajaj auto supported by increasing emphasis on export market to improve sales; increasing mix of 125+ CC portfolio; successful launch of Triumph in new product category; aggressive launch plan in CNG based 2W, launches in CNG and electric variant and expanding network for CNG and E-auto.
Given the increasing share of premium product portfolio like Triumph, healthy growth in EV portfolio (2W+3W) and improving profitability of chetak, it continues to maintain its ‘Buy’ rating on Bajaj Auto shares with a target price of ₹9,612 per share.
Bajaj Auto share price has jumped 30% year-to-date (YTD), while the stock has risen 107% in the past one year.
At 9:25 am, Bajaj Auto shares were trading 2.26% lower at ₹8,814.05 apiece on the BSE.
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