Motilal Oswal Has A Neutral View On The World's Third Largest Bluechip Auto Stock

Motilal Oswal, a leading brokerage firm is neutral about the stock of Bajaj Auto Limited, despite seeing a potential upside of 11% from it. The brokerage feels that the share price of the auto stock will go up to reach a target price of Rs 4,150 per share and the current market price is Rs 3,791.30 Check the details here.

Bajaj Auto Limited is a part of the Bajaj Group. It manufactures motorcycles, scooters and auto rickshaws. It is the world's third-largest manufacturer of motorcycles and the second-largest in India. Its market capitalisation is Rs 1,07,537.94 crore.

Motilal Oswal in its brokerage report mentioned about the updates received from the company. "While export volumes are bottoming out and likely to recover only from 2QFY24E, its entry in Brazil and the upcoming Triumph launch are the new growth drivers. BJAUT's EV plans are gathering momentum with the recent launch of low-speed 2Ws under Yulu brand as well as the upcoming e-3W launches. However, the management cautioned on commodity cost inflation that is gaining in strength from the lows of 3QFY23."

According to the brokerage report, Bajaj Auto will improve its volumes. "Both domestic and export volumes are likely to recover from the low base in FY24 and beyond, driving healthy earnings recovery. We expect the company to benefit from market share gains over the long term, fuelled by: the premiumization trend, the opportunity in exports, and the potential sizeable position in the Scooter market via EVs. However, a large part of its India profit pool (of premium motorcycle and 3Ws) is vulnerable to the possible disruption from electrification. At 15.4x/14x FY24E/FY25E consolidated EPS, the stock's valuation fairly reflects the expected recovery as well as the risk from EVs. Bajaj Auto's dividend yield of 5.0-5.5% should support the stock. We reiterate our Neutral rating with a target price of Rs 4,150 (premised on 16x Dec-24E consolidated EPS)."

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The stock has been picked from the brokerage report of Motilal Oswal, Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.