Stock Market News : Shares of Bajaj Auto hit a new record high of Rs 10,213.10, gaining 3% in Friday’s intra-day trade on the BSE, despite a generally subdued market. In contrast, the BSE Sensex was down by 0.09%, sitting at 80,980 at 10:22 AM.
This rise in Bajaj Auto’s stock surpassed its previous peak of Rs 10,037.30, reached on June 18, 2024. So far, in 2024, Bajaj Auto has significantly outperformed the market, with a 50% surge in its stock price compared to the 12% rise in the BSE Sensex. The sharp increase in Bajaj Auto’s stock price has pushed the company’s market capitalization closer to the Rs 3 trillion mark, currently standing at Rs 2.85 trillion, just 5% away from the milestone.
JP Morgan highlighted that the two-wheeler industry has outpaced other segments with an 18% growth rate for the fiscal year 2025. The industry is seeing strong demand, healthy inventory levels, and easier financing. They project an 8% compound annual growth rate (CAGR) for volumes between FY24 and FY27.
Bajaj Auto, known for manufacturing motorcycles, commercial vehicles, scooters, and electric two-wheelers, sells its products both in India and internationally. The company expects the motorcycle industry to grow by 6-8% in FY25, with the premium segment leading the way. Additionally, despite a slowdown in Nigeria—a key market for Bajaj Auto—exports are expected to improve in the July-September quarter, driven by strong sales in Latin America, which saw a 26% year-on-year increase.
Bajaj Auto has received production-linked incentive (PLI) certificates for five of its electric vehicles, including three electric three-wheelers and two Chetak scooters. The company has also applied for a PLI certificate for the newly launched Chetak 2901. This quarter, PLI benefits contributed to a positive margin of approximately 50 basis points. The company’s management anticipates that profitability in the electric two-wheeler segment will gradually improve, driven by cost control and volume growth. Meanwhile, the electric three-wheeler business is expected to maintain profitability levels similar to those of internal combustion engine vehicles.
Analysts from Elara Capital noted that Bajaj Auto’s reliance on three-wheelers for profitability has decreased, with the domestic two-wheeler segment showing improved profitability. They also expect the company’s new launches and expanded distribution network to boost market share in the electric two-wheeler segment. The brokerage firm reiterated an ‘Accumulate’ rating for the company, with a target price of Rs 11,590, based on 28 times September 2026 earnings per share (P/E ratio), up from 26 times.
Geojit Financial Services echoed these sentiments, stating that Bajaj Auto is expected to strengthen its presence in the domestic market with its premium products, competitive pricing, and ability to meet consumer needs. New products like the Freedom 125 and the Chetak variant are expected to further boost sales. However, while Africa has not fully recovered, the management is optimistic about a gradual recovery in exports, with performance in Q2FY25 expected to be better than Q1FY25. Geojit maintained a ‘hold’ rating for the stock in its Q1FY25 result update.
Stock Market News FAQs
What caused Bajaj Auto’s stock to hit a record high?
Bajaj Auto’s stock surged due to strong market performance, a positive outlook for the two-wheeler industry, and increased investor confidence in the company’s growth prospects.
How has Bajaj Auto’s stock performed in 2024 compared to the overall market?
In 2024, Bajaj Auto’s stock has risen by 50%, significantly outperforming the BSE Sensex, which has increased by 12% during the same period.
What is Bajaj Auto’s current market capitalization?
Bajaj Auto’s market capitalization currently stands at Rs 2.85 trillion, just 5% away from the Rs 3 trillion milestone.
What factors are driving growth in the two-wheeler industry?
The two-wheeler industry is experiencing strong demand, healthy inventory levels, and easier financing options, contributing to an 18% growth rate in FY25 year-to-date.
What are the company’s expectations for motorcycle industry growth in FY25?
Bajaj Auto’s management expects the motorcycle industry to grow by 6-8% in FY25, with the premium segment likely to outperform.
How is Bajaj Auto’s performance in international markets?
Despite challenges in Nigeria, Bajaj Auto’s exports are expected to improve, with strong sales growth in Latin America, where sales increased by 26% year-on-year.
What is the significance of the Production Linked Incentive (PLI) certificates for Bajaj Auto?
Bajaj Auto has received PLI certificates for five of its electric vehicles, which has contributed to a positive margin of approximately 50 basis points this quarter.
How is Bajaj Auto managing its electric vehicle (EV) business profitability?
The company is implementing cost control measures and focusing on volume growth, which is expected to gradually improve the profitability of its electric two-wheeler segment.
What is the outlook for Bajaj Auto’s new product launches?
Analysts expect that Bajaj Auto’s new product launches, including the Freedom 125 and Chetak variant, will strengthen its market share and boost sales in the domestic market.
What are the brokerage firms’ ratings and target prices for Bajaj Auto?
Elara Capital has reiterated an ‘Accumulate’ rating with a target price of Rs 11,590, while Geojit Financial Services has maintained a ‘hold’ rating for the stock.