Bajaj Auto shares gain after Q3 results; valuations divide analysts

Shares of Bajaj Auto Ltd. are trading over 3% higher on Sunday, February 1, after the automaker reported its December quarter earnings after market hours on Friday, January 30.

The company delivered healthy margins despite a challenging operating environment and said it expects to continue gaining market share, particularly in the 150cc-plus segment.

Market share gains are expected to be led by a refreshed Pulsar portfolio over the next 6-7 months, while exports are set to deliver the highest-ever topline performance in dollar terms in FY26.

The company also expects industry growth of 12-15% in Q4 and believes it will continue to outpace the industry, especially in the 125cc-plus category.

What brokerages are saying 

Brokerages have largely retained their ratings on the stock following the Q3 results, with views remaining mixed on valuations, margins and domestic market share trends.

Nomura maintained a 'Neutral' rating on Bajaj Auto with a price target of ₹10,446.

The brokerage said Q3 EBITDA margin came in at 20.8%, slightly ahead of its estimate and consensus, while Q4 margins are expected to remain broadly in line, driven by higher PLI benefits.

Nomura cited revival in domestic market share as a key catalyst and said the stock is trading in the fair value zone at around 20x core FY28F EPS.

Goldman Sachs reiterated its 'Buy' rating with a price target of ₹11,500, describing the quarter as 'in line' and signalling a turning point in the domestic two-wheeler growth trajectory.

Management expects industry growth of 12%-15% over the next six months, with the 125cc+ segment likely to outpace the broader market.

The company plans eight product refreshes over the next four months, along with the launch of a new 125cc motorcycle later this year. Goldman Sachs expects this to support market share gains and a return to double-digit volume growth in the near term.

Jefferies retained its 'Hold' rating with a price target of ₹9,100, citing that December quarter EBITDA and recurring PAT rose 21%-22% YoY, in line with its estimates.

The brokerage remains positive on Indian two-wheeler demand, estimating an 8% industry volume CAGR over FY26-28E, while exports continue to perform well.

However, it flagged concerns over market share erosion in domestic motorcycles and a decline in export volume share, even as it acknowledged Bajaj Auto's strong margin performance.

The stock is currently trading at 24x FY27E PE compared with a 10-year average of 21x.

CLSA maintained its 'Outperform' rating with a price target of ₹11,410.

It said Q3 EBITDA margin of 20.8% was in line with estimates, led by currency tailwinds, as export dollar realisations improved QoQ, while commodity inflation had a 50 bps negative impact.

The brokerage said Bajaj Auto remains optimistic on domestic two-wheeler growth of 12%-15% over the next few quarters on a low base and expects market share gains driven by upcoming refresh launches.

It also expects exports to sustain a 200,000+ units per month run rate, implying 20%-25% YoY growth. For Q4, commodity inflation is expected to have a 50-60 bps impact, but price hikes, scale benefits and currency tailwinds are likely to help protect margins.

On the bearish side, UBS maintained a 'Sell' rating with a price target of ₹9,015, citing challenges from the company's motorcycle-heavy portfolio despite a positive industry outlook.

UBS said Q3 EBITDA was supported by a richer three-wheeler mix and lower staff costs, but flagged structural concerns around segment mix.

Management commentary highlighted expectations of 12%-15% domestic motorcycle industry growth in the coming months, strong export momentum across top overseas markets, sustained export volumes of over 200,000 units per month in Q4FY26, planned product interventions, EV revenue contributing around 25% of domestic revenue in Q3FY26, and Bajaj Auto Credit's AUM at around ₹16,000 crore.

Of the 46 analysts tracking Bajaj Auto, 25 have a 'Buy' rating, 14 recommend 'Hold', and seven have a 'Sell' call on the stock.

Shares of Bajaj Auto ended 0.76% higher on Friday at ₹9,584, while the stock remains flat on a year-to-date basis.