Bajaj Auto 'bulls' see share price target beyond ₹13,000 apiece; Motilal Oswal upgrades after Q1

Shares of Bajaj Auto Ltd. will be in focus on Wednesday, July 22, after brokerages turned more constructive on the two-wheeler maker, following a stronger-than-expected June-quarter performance, driven by robust margins, record exports and healthy cash generation.

It was also a quarter in which quarterly export volumes were higher than domestic deliveries for Bajaj Auto.

The company on Tuesday reported a 42% year-on-year increase in net profit to ₹2,983 crore for the first quarter of FY27, while revenue rose 37% to ₹17,244 crore. EBITDA climbed 45% to ₹3,596 crore, with the EBITDA margin expanding to 20.9% from 19.7% a year earlier.

Why Motilal Oswal Upgraded Bajaj Auto To Buy?

Following the results, Motilal Oswal upgraded the stock to "Buy" from its earlier rating of "neutral" and raised its price target to ₹12,096 from ₹10,519 earlier, implying an upside of about 16% from the stock's Tuesday closing price of ₹10,426. It cited a promising outlook across segments and stronger-than-expected margins.

"Considering its healthy launch pipeline, we expect Bajaj Auto to gradually recover market share in the domestic motorcycle market," Motilal Oswal wrote in its note.

As a result, the brokerage has raised its Earnings Per Share (EPS) estimates by 5% and 9% for financial year 2027 and 2028 respectively. It expects Bajaj Auto to deliver a Compounded Annual Growth Rate (CAGR) of 20%, EBITDA CAGR of 22% and PAT CAGR of 22% as well over financial year 2026-2028.

CLSA Targets On Bajaj Auto Cross ₹12,000

CLSA maintained an "Outperform" rating on Bajaj Auto with a price target of ₹12,068, implying an upside of about 16% from the stock's Tuesday closing.

It highlighted that Bajaj Auto delivered a 20.9% EBITDA margin, 9 basis points higher sequentially and 69 basis points above its estimates, despite a 4.5% sequential rise in commodity costs.

According to CLSA, the impact of higher raw material costs was largely offset by the rupee's depreciation, given around 40% of Bajaj Auto's revenue comes from exports, along with a 2.3% price increase, operating leverage, a richer product mix and discretionary cost-control measures.

Bernstein Remains Bullish

Bernstein maintained its "Outperform" rating on Bajaj Auto with a price target of ₹11,500, implying an upside of about 10% from Tuesday's closing price. It said that Bajaj Auto's strong quarter was driven primarily by execution rather than external policy support.

The brokerage also praised the company's earnings call, describing it as a benchmark for disclosure quality. It said management was transparent on strategy, commodity inflation, production disruptions and the path to EBITDA margin recovery, offering a level of detail that remains best-in-class among two-wheeler manufacturers.

Jefferies says 'Hold' Bajaj Auto

Jefferies maintained a "Hold" rating on the stock with a target of ₹11,500, implying an upside of about 10% from Tuesday's closing. The brokerage noted that first-quarter EBITDA and profit after tax was 5-7% above its estimates, led by better-than-expected margins.

It added that EBITDA margin expanded on a sequential basis despite significant commodity cost headwinds, while demand in the domestic two-wheeler market remains resilient and exports continue to grow strongly.

Jefferies also highlighted management's plans to launch two new Pulsar motorcycles by September and two new motorcycle brands during FY27, prompting it to raise its FY27-FY29 earnings per share estimates by 6-8%.

Exports boost Bajaj Auto Q1 performance

Bajaj Auto said exports delivered their strongest-ever quarterly performance during the June quarter, while the domestic motorcycle business posted double-digit revenue growth. The company also reported record quarterly volumes and all-time high revenue, supported by improved realisations.

Looking ahead, the company said upgrades across its 125cc-160cc motorcycle portfolio are expected to strengthen its competitive position in the domestic market.

According to Bloomberg analyst recommendation data, 30 of the 46 analysts covering the stock have a "Buy" rating, eight recommend "Hold", while eight have a "Sell" rating.

Shares of the company ended 0.9% lower following the earnings results on Tuesday. The stock has gained about 9% so far this year.