Bajaj Auto Shares Plunge 10% Amid Mixed Analyst Ratings and Weaker-Than-Expected Results

Bajaj Auto shares plunged 10% after reporting weaker-than-expected Q2 results. Analysts remain divided on the stock’s outlook, with some citing strong export growth and others expressing concerns about rising competition and the impact of electric vehicles. The company’s expansion plans in Brazil and the introduction of new products, including CNG bikes and e-rickshaws, are expected to drive future growth.

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Bajaj Auto Shares Plunge 10% Amid Mixed Analyst Ratings and Weaker-Than-Expected Results

Bajaj Auto shares fell due to weaker-than-expected Q2 results

Shares of Bajaj Auto Ltd saw a sharp decline on Thursday morning following weaker-than-expected results for the September quarter. Analysts attributed the margin miss to a weak product mix and a muted start to the festive season. They also noted that the recent rally has made the stock’s risk-reward profile less favorable. Emkay Global downgraded Bajaj Auto from ‘Reduce’ to ‘Sell’, setting a new target price of Rs 9,500, while expressing preference for Hero MotoCorp due to a better risk-reward ratio and TVS Motor Ltd for its stronger growth outlook.

Bajaj Auto’s quarterly revenue rose 22% year-on-year, though slightly below Nuvama’s forecasts, driven by lower-than-expected realizations. While volumes increased 16% to 12 lakh units, the net revenue per unit rose by 5% to Rs 1,07,470. EBITDA grew by 24% to Rs 2,650 crore, falling short of Nuvama’s estimate of Rs 2,730 crore due to the revenue shortfall. The EBITDA margin expanded by 40 basis points to 20.2% year-on-year. Overall, adjusted PAT grew 22% to Rs 2,220 crore, slightly under Nuvama’s projection of Rs 2,270 crore due to weaker operating profit.

Bajaj Auto Shares Plunge 10% Amid Mixed Analyst Bajaj Auto shares dropped 10.69% to a low of Rs 10,380 on the BSE, though the stock has still gained 55% year-to-date. Over the past 12 months, it has outperformed the Nifty Auto index, driven by market share growth in the 125cc+ domestic motorcycle segment, improved margins, and a distinctive shareholder reward policy.

Despite this strong performance, analysts see the stock as fairly valued, with Motilal Oswal Financial Services (MOFSL) noting it trades at 38.5x/30x FY25E/26E EPS. They maintain a ‘Neutral’ rating with a target price of Rs 11,450, based on 26x September 2026 consolidated EPS. Nuvama has raised its target price to Rs 13,200 from Rs 12,000.

Sagar Shetty, Research Analyst at StoxBox, highlighted that despite a tax impact of Rs 211 crore, the company’s PAT remained strong but slightly affected margins. Bajaj Auto achieved record volumes and revenue in its CV segment, while also capturing a solid market share in the E2W and E3W segments through effective strategy and distribution. Looking forward, Shetty emphasized that the company’s diverse product range positions it well to capitalize on new opportunities, with its CNG two-wheelers and capacity expansion plans being key factors to watch.

Bajaj Auto Shares Plunge 10% Amid Mixed Analyst Bajaj Auto shares continued to decline, falling over 10% to Rs 10,414 in morning trade on October 17, following a lower-than-expected net profit for the second quarter. The company also revised its growth outlook for two-wheeler sales in India to a modest 5%, at the lower end of its earlier projection of 5-8%.

For Q2 FY2024-25, Bajaj Auto reported a 9% rise in standalone net profit, reaching Rs 2,005 crore, which missed analysts’ expectations. This compares to Rs 1,836 crore in the same period last year. Revenue for the July-September quarter increased by 22% to Rs 13,127 crore, up from Rs 10,777 crore in the previous year.

Bajaj Auto Shares Plunge 10% Amid Mixed Analyst Citi has issued a ‘sell’ rating for Bajaj Auto, with a target price of Rs 7,800 per share, representing a potential 33% drop from the last closing price of Rs 11,616. Citi noted that Bajaj Auto’s Q2 performance was slightly below expectations, primarily due to a miss in average selling prices (ASPs) and gross margins. Citi was also surprised by the company’s muted festive season outlook, despite Vahan data showing a 12% year-on-year increase in registrations.

Macquarie maintains a neutral stance with a target price of Rs 11,200, stating that while Q2 results were in line with expectations, gross margins were weaker due to a higher share of new products. The brokerage also pointed to a softer-than-expected festive season outlook.

Despite a net profit below Moneycontrol’s estimates, HSBC, Jefferies, and Morgan Stanley remain optimistic. HSBC has set a target price of Rs 14,000, citing Bajaj Auto’s 30% market share and 20% EV penetration in the three-wheeler segment, driven by lower total cost of ownership (TCO) and supportive regulations. HSBC also expects the e-rickshaw market to be a key growth driver for Bajaj with an upcoming product launch.

Jefferies, which also rates the stock a ‘buy’, is confident in the company’s export growth, forecasting a 14% volume compound annual growth rate (CAGR) from FY24-27. They highlight Bajaj’s gains in e-2Ws, increasing CNG bike volumes, and capacity expansion in Brazil.

Morgan Stanley remains ‘overweight’, praising Bajaj’s margin maintenance but noting that the rise of electric vehicles (EVs) could offset some product mix gains. Bajaj Auto reported strong performance in Latin America (LATAM) with 20% growth year-on-year, though African markets showed a decline. The company expects better export results in Q3 compared to Q2.

Bajaj Auto is increasing its presence in Brazil by expanding production at its Manaus facility from 20,000 to 35,000 units annually, supported by an Rs 84 crore investment. Shares of Bajaj Auto have risen by 70% since the start of the year.