Bajaj Auto’s Stock Soars 2% Post Q3 Triumph: Navigating Your Next Move – Buy, Sell, or Hold?

by | Jan 25, 2024 | 0 comments

Bajaj Auto, a leading two-wheeler manufacturer, has recently witnessed a notable increase in its share value, rising by 2% to Rs 7,360 on January 25. This upsurge is a continuation of the growth observed the previous day and is primarily attributed to the company’s exceptional performance in terms of revenue and net profit for three consecutive quarters. Analysts have varied opinions on Bajaj Auto’s stock. They are optimistic about several aspects, including the company’s progression towards electric vehicle production, improvement in the variety and quality of products, and a rebound in sales. However, there is a sense of caution due to the intensifying competition in the market.

On January 24, just before the announcement of their financial results, Bajaj Auto’s stock had already increased by 1.55%, closing at Rs 7,206. Since October, the stock has experienced a substantial growth of over 42%.

Morgan Stanley, an esteemed financial services firm, maintains an ‘overweight’ stance on Bajaj Auto, setting a target price of Rs 8,082 per share. This target suggests a potential 12% increase from the stock’s previous closing price. Analysts at Morgan Stanley recognized the last quarter (October-December) as particularly strong for Bajaj Auto, highlighting improvements in product mix as a key factor supporting the company’s gross margin and EBITDA.

Jefferies, another well-regarded financial advisory firm, has given Bajaj Auto a ‘buy’ rating with a target price of Rs 9,000, indicating nearly a 25% upside. The firm anticipates a significant rebound in the two-wheeler segment, projecting a 15% volume Compound Annual Growth Rate (CAGR) from FY24 to FY26. Bajaj Auto’s growing emphasis on electrification, where it currently holds a 13% market share, is seen as a positive development. The company’s three-wheeler segment is also receiving favorable responses.

In its fiscal third-quarter report, Bajaj Auto revealed a 37% year-on-year increase in net profit, amounting to Rs 2,041.88 crore. This impressive growth was fueled by strong sales of its two-wheelers, strategic price increases, and sustained demand.

The company, known for the Triumph brand, saw a 30% rise in revenue during the October-December period, reaching Rs 12,113.51 crore. This figure represents a significant increase from the Rs 9,315 crore turnover reported in the same quarter of the previous fiscal year. The improvement in Bajaj Auto’s financial performance is partly due to a shift towards more premium vehicles, enhancing the product mix. The company also reported an increase in its margin to 20.1%, a rise of +100 basis points year-on-year. This margin enhancement is attributed to better realizations, dynamic cost management, and operating leverage, effectively balancing the investments made in the competitive electric scooter segment.

 

Disclaimer: Investment opinions and tips on Stockmarkets.co.in are solely those of the individual experts and do not reflect the stance of the website or its management. For investment decisions, Stockmarkets.co.in recommends consulting with qualified professionals.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

17 − thirteen =

Related Articles