- Bajaj Auto's target price raised to Rs 12,346 by CLSA, second-highest among 49 analysts
- CLSA expects GST cuts from October to boost two-wheeler demand and market share
- New product launches in 125cc segment planned during festive season to support growth
Bajaj Auto Ltd. received the second-highest price target among the 49 analysts tracked by Bloomberg after CLSA raised its target price to Rs 12,346 from Rs 12,068 and increased its earnings estimates, citing a potential demand boost from GST cuts.
CLSA raised its FY27 and FY28 earnings per share estimates by 3%-4% and maintained its outperform rating on Bajaj Auto. The brokerage said GST cuts from October could accelerate demand in the two-wheeler market and help the company report stronger growth relative to its peers.
The revised target price is the second-most bullish among the 49 analysts tracked by Bloomberg.
The brokerage's investment case rests on a recovery in two-wheeler demand after the GST changes, continued growth in exports, new product launches and Bajaj Auto's position in the premium motorcycle market.
GST Cuts Could Accelerate Growth
"GST rate cut implemented from October would be better against peers," CLSA said.
The brokerage said the GST changes could create a higher base for growth from October. It also expects Bajaj Auto to benefit from the GST structure in the 125cc segment, where the company is preparing to introduce new products.
CLSA said Bajaj Auto plans a series of product refreshes and facelifts during the festive period, alongside the launch of two new brands in the 125cc segment. The brokerage expects the launches to support the company's market share.
Exports Could Benefit From Weaker Rupee
CLSA also pointed to Bajaj Auto's export business as a source of growth.
"Exports could continue to benefit; beneficiary of weaker INR," the brokerage said.
Bajaj Auto's domestic motorcycle portfolio is skewed towards the premium segment, while its export business could benefit from currency movements, CLSA said. It expects the company to maintain growth through a combination of domestic demand and exports.
The brokerage also said Bajaj Auto's premium motorcycle portfolio could support growth in the domestic market, while the company continues to expand its product range.
Earnings Estimates Raised
CLSA raised its FY27 and FY28 earnings estimates by 3%-4% and increased its price target to Rs 12,346.
The brokerage said it had also revised the value of Bajaj Auto's investments and its valuation assumptions. It maintained its outperform rating on the stock.
The company's performance in the coming quarters will depend on the pace of demand growth after the GST changes, the response to new product launches and the continuation of export momentum, according to CLSA.
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