Buy Bajaj Auto target of Rs 3575: Sharekhan

January 21
17:24 2020

Sharekhan’s research report on Bajaj Auto

BAL is likely to outpace 2W industry driven by new launches across segments and is aiming for 24% market share over the next few years as against 19% currently. BAL would be least impacted by transition to BS6 norms given higher share of premium motorcycles (about 40%). Also, higher share of exports (about 45%) which are immune to BS6 would limit impact further. Motorcycle exports are on strong footing driven by market expansion in key geographies and entry into new markets. We expect 7-8% growth in exports to continue. We expect BAL to report mid single digit volume growth in FY21 as against flat volumes expected for the industry. Earnings growth to accelerate to 9% over FY20-22 as against 3% in FY17-19 period. BAL is preferred pick in 2W.


We upgrade our recommendation on Bajaj Auto Ltd (BAL) to “Buy” from “Hold” earlier with revised PT of Rs 3,575 as we rollover our target multiple on FY2022 earnings.

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