KR Choksey upgrades rating on Bajaj Auto to 'buy', sets record target price - key reasons

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Bajaj Auto has witnessed a remarkable 70% rally in its share price this year so far, marking the best yearly performance since 2009. This stellar performance can be attributed to a surge in domestic sales, sequential improvement in exports, strong growth in the 125cc+ bike segment, a significant rise in Triumph sales, and strong financial performance. On November 28, the stock achieved a significant milestone by surpassing the ₹6,000 mark and has since maintained its upward trajectory, reaching an all-time high of ₹6,217 apiece during Monday's trade.

Projections from domestic brokerage firm KR Choksey indicate that the stock is poised for further upward momentum. Also Read: RIL, HDFC Bank, Infosys, and 5 other large caps are 7-25% below all-time highs In its recent report, the brokerage highlighted the company's strong volume growth in the domestic market during the festive season, and it says that the company is witnessing healthy demand even after the end of the festive season. It further added that the company's sharp focus on the 125cc+ segment within domestic 2W is yielding market share gains and positive mix change.

During Sep-Oct-Nov 2023 period, retail growth for the domestic motorcycle industry stood at 8.0% YoY, while Bajaj Auto grew at 2x that rate. Notably, in the 125cc+ segment, Bajaj Auto grew by 3x the industry growth rate of 9.0% YoY, KR Choksey noted. According to the brokerage, the 125cc+ segment now accounts for 65% of Bajaj Auto's domestic 2W volumes as compared to 50% for the industry.