Bajaj Auto shares slip 4% after Q1 results. Should you buy, sell or hold?
slipped nearly 4% to Rs 7,879 in Thursday's intraday trade on the BSE, even after the automaker reported its Q1 results for FY26. The company posted a consolidated profit after tax (PAT) of Rs 2,210 crore, up from Rs 1,942 crore in Q1FY25 — a 14% year-on-year (YoY) increase.
Revenue from operations rose 10% YoY to Rs 13,133 crore, compared to Rs 11,932 crore in the same quarter last year. The growth was driven by strong double-digit gains in exports, premium motorcycles, commercial vehicles, and the Chetak EV.
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EBITDA came in at approximately Rs 2,500 crore, with an EBITDA margin of 19.7%, down 50 basis points quarter-on-quarter, primarily due to lower dollar realisations. However, the decline was largely offset by an improved product mix and operating leverage, helping mitigate the impact of commodity inflation.
The company said it maintained a healthy balance sheet and continued generating strong free cash flows, adding around Rs 1,200 crore during the quarter.
Export revenue hit a record high, supported by broad-based, volume-led double-digit growth in Africa, Latin America, and Asia. The MENA region, however, remained subdued amid ongoing geopolitical tensions.
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Should you buy, sell, or hold Bajaj Auto's stock? Here's what brokerages say:
Nuvama
Nuvama has maintained a 'Buy' rating on Bajaj Auto, though it has revised the target price to Rs 9,400 from Rs 10,700 earlier.
Nuvama retained a positive outlook following the Q1 EBITDA beat. It estimates a 7% volume CAGR over FY25–28E, driven by 3% domestic and 13% export growth. Export momentum is likely to continue, especially in Latin America and Asia. The brokerage projects 10% CAGR in revenue and EBITDA, with RoE at around 28%. The target price is based on 25x Sep-27E core earnings.
Avendus
Avendus has maintained a 'Buy' rating on Bajaj Auto, while trimming the target price to Rs 9,350 from Rs 9,700.
Avendus forecasts a ~5% domestic volume CAGR and ~12% export volume CAGR for FY25–27E. Margins are expected to reach ~20% by FY27E, with EV portfolio expansion driving medium-term growth. The stock is valued at 25.5x FY27E EPS.
JM Financial
JM Financial
maintained a 'Hold' rating on Bajaj Auto, with target price of Rs 8,700.
JM Financial expects lower domestic volumes to be offset by higher exports and improved realisations. Despite trimming EBITDA margin estimates by 10bps for FY26E and FY27E, the brokerage maintains its Hold rating, with a Mar'27 TP of Rs 8,700, based on 22x FY27E EPS.
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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