Buy Bajaj Auto; target of Rs 14,300: Anand Rathi

What happened

Anand Rathi maintained a BUY rating on Bajaj Auto and raised its target price to Rs 14,300. The brokerage said Bajaj Auto's standalone EBITDA, a rough measure of operating profit, grew 37% year on year in Q2FY27.

Confirmed

Global impact / market context

A higher target price signals the brokerage expects more upside in the shares. Its optimism rests on strong two-wheeler demand at home and abroad, an aggressive electric vehicle push and better profit per sale, which together could support earnings growth and justify a richer valuation.

Analyst inference

The report points to GST relief and market expansion lifting two-wheeler demand, helping Bajaj Auto more than peers because currency gains and price rises largely offset costlier inputs. That steadier profit per sale underpins the brokerage's forecast of double-digit growth over the coming years.

Analyst inference

What to watch

1. Anand Rathi said the success of new model launches and the company's domestic market share are the key things to monitor, since both shape whether forecast volume and revenue growth is achieved. Confirmed
2. The brokerage introduced fresh forecasts for future years, expecting volume, revenue, EBITDA and profit after tax to grow at specific rates, which are estimates rather than reported results. Proposed
3. Watch whether currency gains and price increases keep offsetting higher input costs. If they stop, profit per sale could fall and the valuation multiple supporting the Rs 14,300 target could come under pressure. Analyst inference

Evidence

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