Morgan Stanley has cut the price target for Pune-based automotive heavyweight Bajaj Auto Ltd. by 8% to Rs 9,128. The brokerage has also revised its volume estimates, Ebitda margin, earnings per share estimates, and the compound annual growth rate as well.
Volume estimates have been reduced by 4% for fiscal 2026 and 5% for fiscal 2027. The compound annual growth rate for the next 10 fiscals has been reduced to 8.5%, on account of stunted growth in the domestic market, according to the report. EPS for the current and succeeding fiscals has been cut by 5-6%, while long term Ebitda margin stands at 20%.
The company's bull case sees a potential downside from Rs 12,459 to Rs 11,323, while the base case is down at Rs 9,128 from Rs 9,891.
Bajaj Auto has reported a decline in its April sales due to muted demand in the world's largest two-wheeler market.
The automaker shipped a total of 3,65,810 vehicles in April, as against 3,88,256 units in the year-ago period, registering a decline of 6% year-on-year, according to an exchange filing on May 2.
While its two-wheeler sales were down 13% at 1,88,615 units, two-wheeler exports saw a 4% surge at 1,29,322 units. The company's three-wheeler business in India and abroad grew 3% year-on-year to 47,873 units.
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