Bajaj Auto Q4 Results Review - Margins Maintained Despite Lower Sequential Volumes: Motilal Oswal

Motilal Oswal Report

Bajaj Auto Ltd. reported healthy Q4 FY24 performance as Ebitda/profit after tax came in higher at Rs 23.1 billion/Rs 19.4 billion (versus estimate of Rs 21.6 billion/Rs 18.2 billion) driven by a better average selling price at Rs 107,500/unit (versus estimate of Rs 102,600/unit).

While Bajaj Auto is likely to outperform the domestic motorcycles segment led by its healthy launch pipeline, the export outlook remains uncertain given the geopolitical headwinds in key markets. We maintain our FY25/FY26 estimates.

Bajaj Auto has witnessed the most rerating in the last 12 months, aided by a better-than-expected performance and a one-of-a-kind policy to reward its shareholders.

After the sharp rally, however, the stock at ~28 times/24 times FY25E/26E EPS appears fairly d. We reiterate our Neutral rating with a target price of Rs 8,360 (premised on 22 times FY26E consolidated earnings per share).

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