Bajaj Auto Q3 Review - Motilal Oswal Maintains 'Neutral' On The Stock, Says Favorable Forex Supports Margins

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Motilal Oswal Report

Bajaj Auto Ltd. delivered an in-line performance in Q3 FY25, with volume growth of ~2%. Favorable forex and a higher spares mix helped Bajaj Auto sustain margins at 20%+ despite a rising EV mix.

We have marginally lowered our FY25/FY26 earnings estimates by 2% each. The key concern is that Bajaj Auto has lost share in domestic 125cc+ segment on YTD basis. While exports seem to have revived in the near term, the longer term outlook remains uncertain given the adverse macro globally.

Hence, despite a correction in the stock price recently, Bajaj Auto at ~25.5x FY26E/22.2x FY27E EPS appears fairly-valued. Therefore, we maintain a Neutral rating with a target price of Rs 8,770, based on 24x Dec’26E consolidated earnings per share.

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