Shares of Bajaj Auto fall more than 11% as Q2 underwhelms D-St. Is it better to purchase or sell?
Bajaj Auto Share Price: After the company’s Q2 FY25 profits fell short of forecasts, shares of Bajaj Auto fell more than 11%. At Rs 2,005 crore, the net profit increased by 9%. With ratings ranging from buy to sell, analysts’ responses were divided, pointing to things like export recovery, festive demand, and gross margins. The firm appears to have bright future potential in both CNG and electric automobiles.
The two-wheeler giant Bajaj Auto’s stock dropped 11.42% to a day’s low of 10,290 on the BSE following the release of Q2 FY25 results that fell just short of street projections.
For the quarter ending in September 2024, the firm reported a standalone net profit of Rs 2,005 crore, up 9% from Rs 1,836 crore during the same time the previous year.
Compared to Rs 10,777 crore in the same quarter of the prior fiscal year, revenue from operations increased by 22% to Rs 13,127 crore.
Following the Q2 results, brokerages said the following:
Target price for Macquarie on Bajaj Auto: Rs 11,072 | Neutral
With a target price of Rs 11,072, Macquarie has kept its rating on Bajaj Auto neutral.
Gross margins were disappointing, despite the second quarter being in line with projections. This was mainly because a larger percentage of new goods contributed to the shortfall. Furthermore, the joyous outlook seems subdued in comparison to Macquarie’s anticipations.
Target price for Jefferies on Bajaj Auto: Rs 13,400
Jefferies has raised the target price for Bajaj Auto from Rs 11,630 to Rs 13,400, maintaining its buy rating.
With a subdued remark on seasonal demand, the business observed that although the company recorded significant growth, it fell just short of expectations. Jefferies is still optimistic about the stock, though, pointing to a rebound in exports that creates new growth opportunities.
Selling on Bajaj Auto by Emkay Global | Target Price: Rs 9,500
Emkay has set a target price of Rs 9,500 and lowered Bajaj Auto from its previous “reduce” rating to “sell.” The company’s decreased average selling prices (ASPs) contributed to its rather poor Q2 performance. Retail growth for two-wheelers has been slow (6.7% YTD for FY25; 5.7% from September to October), and market share in the quickly expanding 125cc segment has decreased.
Management expects industry growth in FY25 to be less than 8% and more like 5% if the poor festive performance keeps up. Although exports are increasing, the important Nigerian market is still 50% below its high. Furthermore, the three-wheeler market is reaching all-time highs, which might result in an elevated base effect.
Nuvama on Bajaj Auto: Buy | Target Price: Rs 13,200
Nuvama has raised the target price for Bajaj Auto from Rs 12,000 to Rs 13,200 while maintaining its buy rating. The company’s Q2 FY25 EBITDA increased 24% year over year to Rs 2,650 crore, and the volume prospects for two-wheelers are promising. With a 7% rise in the domestic segment and a 10% growth in exports, Nuvama projects an 8% CAGR for FY24–27.
By FY27, the company’s share of domestic two-wheelers is predicted to surpass 20%, demonstrating its growing influence in the electric and CNG markets. Additionally, the domestic brokerage firm increased its FY25–27 EBITDA projections by as much as 3%.
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Disclaimer: The above article is for educational and news purposes, this is not a buying or selling recommendation. TraderPulse recommends that users to check with certified experts before making any investment decisions.
