Synopsis : Bajaj Auto climbed to a fresh 52-week high after its June-quarter earnings, with major brokerages turning more optimistic on the stock. Strong export momentum and resilient margins remain the key drivers, although some concerns over domestic market share persist.
The earnings performance prompted leading brokerages to revise their outlook on the stock. While Nuvama Institutional Equities and Motilal Oswal Financial Services raised their target prices and reiterated their bullish stance, JM Financial remained cautious on the domestic motorcycle business despite acknowledging the company's strong export performance.
The common theme across all three brokerage reports was Bajaj Auto's continued strength in overseas markets, which is expected to remain the primary growth driver over the next few years.
Nuvama raises target price, expects exports to remain the key growth engine
Nuvama Institutional Equities maintained its 'Buy' rating on Bajaj Auto while increasing its target price from ₹11,600 to ₹12,000, implying an upside potential of approximately 15.3% from current levels.
According to the brokerage, Bajaj Auto's June-quarter performance was largely in line with expectations, with revenue growing 37% year-on-year to ₹17,240 crore.
Operating performance exceeded estimates, as EBITDA jumped 45% year-on-year to ₹3,600 crore, supported by lower-than-expected operating expenses.
Following the quarterly performance, Nuvama raised its EBITDA estimates for FY27 and FY28 by around 3%, reflecting higher volume expectations.
The brokerage now expects Bajaj Auto's overall volumes to grow at a 12% compound annual growth rate between FY26 and FY28.
This growth is expected to be driven by:
- Around 7% growth in domestic volumes
- Approximately 17% growth in exports
Nuvama also believes Bajaj Auto will gradually regain domestic market share through product refreshes across its Pulsar, KTM and Triumph brands, along with the launch of two new motorcycles in the 125cc category.
The brokerage expects the company's domestic motorcycle market share to improve from 10.7% in FY26 to 11% by FY28.
Motilal Oswal upgrades Bajaj Auto to 'Buy'
Motilal Oswal Financial Services turned more optimistic on Bajaj Auto by upgrading the stock from 'Neutral' to 'Buy'.
The brokerage also increased its target price to ₹12,096, indicating an upside potential of around 16%.
According to Motilal Oswal, Bajaj Auto once again demonstrated the resilience of its business model despite higher raw material costs.
The brokerage highlighted that the company managed to sustain industry-leading operating margins while continuing to invest in future growth opportunities.
Management also remained optimistic about exports, targeting shipments of more than 2.5 lakh units per month during the second quarter, supported by healthy demand across international markets.
Motilal Oswal expects Bajaj Auto's domestic motorcycle business to gradually recover as new product launches gain traction.
The brokerage also noted that Bajaj Auto continues to strengthen its presence in the electric vehicle segment across both electric two-wheelers and electric three-wheelers.
Given the stronger-than-expected June-quarter performance and improving outlook, Motilal Oswal increased its earnings estimates by:
- 5% for FY27
- 9% for FY28
The brokerage believes Bajaj Auto continues to offer an attractive combination of strong earnings growth, healthy return ratios, generous dividend payouts and a resilient business model.
JM Financial remains cautious on domestic business
Unlike the other brokerages, JM Financial retained its 'Reduce' recommendation on Bajaj Auto.
However, it raised its target price from ₹9,600 to ₹9,850, citing continued strength in exports.
According to the brokerage, Bajaj Auto's domestic motorcycle business continues to face challenges.
Management indicated that domestic demand has lagged overall industry growth, particularly because the sub-125cc motorcycle segment remains weak.
JM Financial also pointed out that Bajaj Auto's domestic market share declined slightly to 10.5% in Q1FY27, compared with 10.8% in Q4FY26.
The brokerage noted that this remains significantly below the 12.1% market share the company had achieved during Q3FY24.
While Bajaj Auto has refreshed several products recently, JM Financial believes these launches have not yet translated into meaningful gains outside the company's flagship Pulsar franchise.
Despite these concerns, the brokerage acknowledged that the company's export business continues to perform exceptionally well.
Demand remains robust across key international markets, particularly Africa and Latin America.
Bajaj Auto also reported an EBITDA margin of around 21% during the June quarter, benefiting from operating leverage and favourable currency movements.
Although higher raw material costs and expenses related to new launches may create some pressure on margins going forward, JM Financial expects exports to continue supporting overall earnings growth.
The brokerage now expects Bajaj Auto's total volumes to grow by around 14% during FY27, largely driven by overseas demand.
Export momentum remains the common theme
Despite differences in their ratings, all three brokerages agreed on one key point—Bajaj Auto's export business continues to be its strongest growth driver.
Healthy demand across international markets, combined with improving product offerings and continued expansion into electric vehicles, has strengthened confidence in the company's medium-term earnings outlook.
While domestic demand remains an area to watch, exports continue to offset some of the weakness in the local market.
Bajaj Auto share price performance
Bajaj Auto has continued to outperform the broader market over the past year.
The stock has:
- Gained around 4% over the last five trading sessions.
- Risen 5.7% during the past month.
- Delivered approximately 15% returns over the last six months.
- Generated nearly 30% returns over the previous one year.
The latest rally also pushed the stock to a new 52-week high.
Conclusion
Bajaj Auto's strong June-quarter earnings have reinforced confidence among several leading brokerages, particularly because of the company's robust export business.
Nuvama and Motilal Oswal expect exports, healthy profitability and upcoming product launches to continue supporting earnings growth over the next few years.
JM Financial remains relatively cautious because of continued weakness in domestic motorcycle demand but also acknowledges that the export business remains a major strength.
Going forward, investors are likely to closely monitor whether Bajaj Auto can convert its strong overseas momentum into sustained domestic market share gains while maintaining its industry-leading profitability.
Disclaimer : The stock ratings, target prices and financial projections mentioned in this article are based on research reports published by Nuvama Institutional Equities, Motilal Oswal Financial Services and JM Financial and are presented solely for informational and educational purposes. They do not constitute investment advice or a recommendation to buy, sell or hold any security. Investments in equities are subject to market risks, and future returns or target prices are not guaranteed. Investors should conduct their own due diligence and consult a SEBI-registered financial advisor before making any investment decisions.
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