Neutral Bajaj Auto; target of Rs 4000: Motilal Oswal

Motilal Oswal recommended Neutral rating on Bajaj Auto with a target price of Rs 4000 in its research report dated January 21, 2021.

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Motilal Oswal’s research report on Bajaj Auto

Bajaj Auto (BJAUT)’s operating performance was driven by favorable mix, lower marketing spends, and operating leverage. It has both near (3W recovery) and long term (premiumization and exports) levers, which are fairly reflected in current valuations. n We upgrade our FY21E/FY22E EPS by 7%/5% to factor in mix, cost savings, and an upgrade in KTM’s PAT. Maintain Neutral.

Outlook

Valuations at 17.9x/16.6x FY22E/FY23E consolidated EPS largely capture the strong growth momentum. Maintain Neutral, with a TP of INR4,000/share.

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