Target: ₹11,100
CMP: ₹9,664.15
We upgrade Bajaj Auto to Buy from Add and roll forward our TP to December 2027E, hoisting it about 17 per cent to ₹11,100 (from ₹9,500). This implies an upside of about 17 per cent (+2.7 per cent dividend yield in December 2027E) on account of FY27E/28E EPS upgrade by about 4/9 per cent and incorporating Bajaj Auto Credit at ₹300/share, basis 2x FY28E P/B, given the meaningful ramp-up in operations (H1FY26 PAT at ₹230 crore vs ₹60 crore in FY25).
We believe Bajaj Auto offers an attractive risk-reward at current levels (1YF at 24x vs 38x/32x for TVSL/EIM), backed by strong exports trends coupled with the launch of a refreshed Pulsar range in CY26 translating into a healthy 14 per cent EPS CAGR over FY26E-28E. Bajaj Auto’s overall domestic 2W market share has bottomed out, with slight pick-up, driven by market share of both premium motorcycles and e-scooters in Q3FY26TD.
Export momentum remains strong, led by LatAm/Asia, which coupled with currency depreciation-led tailwinds should aid the overall margin trajectory given its strong exports volume mix (about 44 per cent mix as of FY26YTD vs 39 per cent in FY25YTD).
Bajaj Auto’s e3W portfolio has also scaled up meaningfully, and overtaken M&M to become the 1 in e3Ws (around 31.8 per cent market share in December 2025 vs 31.9 per cent in FY25) while sustaining its #2 spot in e2Ws for the last four months, with EBITDA break-even already achieved. Also, a gradual turnaround in KTM provides incremental upside potential of ₹2,000 crore.