Bajaj Auto’s stock has been a focal point for investors, especially following its recent quarterly earnings report. On October 17, 2024, the company’s shares took a significant hit, dropping over 8% due to disappointing results and lowered guidance. Despite this, several brokerages remain optimistic about the company’s future prospects.
Main Points
As of today, Bajaj Auto’s share price stands at approximately ₹11,806.45, down from ₹12,157.45 the previous day. This decline reflects a broader trend, with the stock having decreased by 6.46% over the past week and showing a 30.02% increase over the last six months. The company’s market performance has been mixed, with analysts providing varied ratings based on recent financial results.
Price Targets:
- Short-Term Targets:
- Upside Target: ₹11,800
- Downside Target: ₹11,104
- Medium-Term Targets:
- Upside Target: ₹13,200
- Downside Target: ₹9,500
- Long-Term Targets:
- High Estimate: ₹14,000
- Low Estimate: ₹6,800
These targets are based on technical analysis and market trends observed in Bajaj Auto’s trading patterns. Analysts suggest that if the stock trades below ₹10,926.82, it may be more likely to hit downside targets.
Recent Earnings Report Highlights
In its latest earnings report for Q2 FY2024-25, Bajaj Auto reported a net profit of ₹2,005 crore, marking a 9% increase year-on-year but falling short of analyst expectations. Revenue surged by 22% to ₹13,127 crore compared to ₹10,777 crore in the same quarter last year. Despite these positive figures, concerns arose regarding gross margins and average selling prices (ASPs), which did not meet market forecasts.
Following the earnings announcement:
- HSBC has set a target price of ₹14,000 per share while highlighting a potential market share growth to 30% and increased electric vehicle (EV) penetration.
- Jefferies maintains a buy rating with an updated target price of ₹13,400.
- Macquarie holds a neutral stance with a target price of ₹11,072.
- Conversely, Citi has issued a sell recommendation with a target price of ₹7,800 due to concerns about ASPs and festive demand outlook.
Despite the recent downturn in share price following disappointing quarterly results, many analysts express optimism about Bajaj Auto’s long-term growth trajectory. Factors contributing to this positive outlook include:
- A cyclical recovery in exports.
- Rising demand for two-wheelers in India.
- The company’s strategic focus on expanding its electric vehicle offerings.
Bajaj Auto is also ramping up production capacity in international markets like Brazil while maintaining significant growth in its domestic two-wheeler segment.
Conclusion on Market Trends
The overall sentiment surrounding Bajaj Auto remains cautiously optimistic. While immediate challenges exist due to lower-than-expected earnings and market volatility, the company’s strategic initiatives in EVs and export markets could provide substantial growth opportunities moving forward.
