Bajaj Auto Stock Analyzed by Motilal Oswal
Motilal Oswal has maintained a ‘Neutral’ rating for Bajaj Auto, setting a target price of ₹9,070. Despite management’s optimism about new product launches and EV ambitions, the brokerage remains cautious due to ongoing concerns about Bajaj Auto’s declining market share in domestic motorcycles. Specifically, the loss of dominance in the 125cc+ segment remains a significant worry that needs close monitoring, particularly regarding the success of the KTM turnaround.
Key Points
- Bajaj Auto’s market share decline, especially in 125cc+ bikes, is a key concern.
- New motorcycle launches are planned to address this declining share.
- KTM’s success is crucial, driving synergy across operations and brands.
- Export growth is strong, led by Latin American markets and currency benefits.
- E-vehicle ambitions with Chetak and Riki drive future growth opportunities.
- Restructuring of KTM operations will yield operational efficiencies over time.
Bajaj Auto is aggressively trying to regain lost ground in the domestic motorcycle market. They’re launching a new 125cc commuter bike in FY27. Additionally, three new Pulsar variants are scheduled for releases in December 2025, March 2026, and May 2026.
The company also intends to intervene in the Dominar brand with the introduction of a 350cc Triumph variant. Their recent acquisitions of KTM brands—Adventure, Super Moto, and Duke 160—are also anticipated to contribute to sales growth. Motilal Oswal projects a 6.5% volume CAGR for Bajaj Auto over FY25-27E, reflecting these initiatives.
Strong export momentum is another positive factor. Bajaj Auto recently surpassed 200,000 units per month in exports, a feat achieved after 40 months. Latin America is now the largest export market. Management believes Brazil and Mexico will continue to drive this growth, and currency fluctuations will offer margin support.
Bajaj Auto is also investing heavily in electric vehicles. They’re the second-largest 2W EV player thanks to Chetak demand. A new Chetak launch next year aims to solidify their leadership. Notably, Bajaj Auto is positioned to break even in 2W EV EBITDA in Q2.
In the 3W EV segment, the ‘Riki’ e-rickshaw is expected to boost growth. Following the KTM acquisition, H1CY26 will focus on restructuring KTM operations, leveraging synergies across manufacturing, supply chain, and distribution. Non-core businesses like bicycles and cars will be exited to concentrate on KTM and Husqvarna. These changes are anticipated to become visible from H2CY26.
Ultimately, Bajaj Auto’s success hinges on executing its strategic plans effectively.
