This High Dividend Paying Bajaj Stock's Engines Are High! Share Hits 52-Week High, Beats Brokerages Target

Bajaj Group-backed automobile flagship, Bajaj Auto has roared to sky-high levels. On November 23, this high dividend-paying large-cap stock not only shrugged off the dull market sentiment, but also hit a new 52-week high, surpassing brokerage Religare's target price. There is more potential for upside in this large cap.

On November 23, Bajaj Auto touched a new 52-week high of Rs 5,945.80 on BSE. Religare Broking said that its target price of Rs 5,944 on Bajaj Auto has been achieved.

The brokerage further said investors can continue to 'Hold' Bajaj Auto shares.

According to Religare, Bajaj Auto is amongst the leading players in the motorcycle space while it is a top exporter of 2/3 wheelers in the country. Its exports have remained under pressure; however, on a sequential basis, it is witnessing a recovery in its key markets which will aid in volumes and revenue growth.

Going ahead, Religare's note said, the 2-wheeler industry will witness premiumization in the 125cc+ category, consequently Bajaj Auto has been focusing on increasing its product portfolio and attracting higher volumes for the 125cc+ segment which would result in market share gains and higher realizations.

It added, "The strong domestic business outlook coupled with gradual recovery in exports, we remain bullish on growth prospects of the company and estimate its revenue/EBITDA/PAT to grow at 19.3%/23.6%/22.2% CAGR over FY23-25E."

Overall, Bajaj Auto shares had rallied by 3.30% during the trade of Thursday before ending at Rs 5921.85 apiece up by 2.9% on BSE with an m-cap of Rs 1,67,563.10 crore. Year-to-date, Bajaj Auto shares have gained by nearly 66% on the exchange.

Bajaj Auto is among dividend king stocks. In the last 12 months, the company paid a total dividend of whopping 1400% amounting to Rs 140 per share. At the current price level, its dividend yield is at 2.36%.

Bajaj Auto shares have also surpassed target prices of brokerages like Geojit BNP Paribas, KR Choksey, and ICICI Securities which were set after Q2 results.

On the financial results, Religare's note said, Bajaj Auto posted strong overall performance as its Q2FY24 revenue grew by 5.6% YoY/4.6% QoQ to Rs 10,777 Cr. The growth was mainly driven by the domestic business of motorcycles and 3-wheelers segment. Albeit a decline of 8.8% YoY in export volumes, it showed a sequential recovery of 7.9% and as a result, it accounted for ~30% of the overall revenue while the domestic business accounted for ~70%. Consequently, PAT was reported at Rs 1,836 Cr, higher by 20% YoY/10.3% QoQ.

Bajaj Auto recorded highest highest-ever pulsar family sales over 161,000 in October, taking overall two-wheeler sales to 408,144 units up by 19%. While commercial vehicle sales were also the highest ever at a staggering 63,044 units in October 2023, up by 18%. Bajaj Auto's overall sales stood at 471,188 units which included exports of 141,570 vehicles in October 2023, registering a growth of 19% YoY.

From April to October 2023, Bajaj Auto's sales stood at 2,552,548 vehicles, up by 3% from the corresponding period of the previous year.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.