Buy Bajaj Auto; target of Rs 13,100: Emkay Global Financial

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Export growth: BJAUT's exports remained a significant engine of growth and profitability, with management aiming to sustain a ~250k units/month exports run rate, implying ~23% yoy growth in 2H.
  • Scooter mix shift: The company's product mix has gradually shifted toward scooters, which contributed ~34% to domestic revenues and turned accretive to domestic margins.
  • Calibrated pricing and cost management: BJAUT absorbed elevated input costs through calibrated pricing, covering 50-60% of 1H inflation, and favorable currency tailwinds on exports.
  • Capacity expansion: Seeing higher demand, BJAUT plans to increase overall capacity to ~775k units/month, including the ramp-up of Chetak to ~80k units per month.

Thesis Validation Checklist

To validate the investment thesis, watch for: sustained export growth, stable domestic market share, successful capacity expansion, and management's ability to navigate commodity price pressures. Key signals include domestic 2W industry growth, export volumes, and the company's ability to maintain margins despite input cost pressures.