Bajaj Auto (BJAUT IN) – Q4FY26 Result Update – Strong Performance Aided by Margin Expansion – Downgrade to ‘HOLD’
Published on 11 May 2026
We downgrade the stock to ‘HOLD from ‘Accumulate’ due to run-up in prices following the buyback announcement and disruptions from the West Asia conflict. BJAUT’s Q4FY26 standalone revenue of INR160.1bn (+31.8% YoY, +5.2% QoQ) is 1.7% above BBGe (met PLe). Margins expanded as favorable Fx, mix and operating leverage more than offset RM inflation, higher discretionary spends and absorption of PM E-Drive (e3Ws) incentive withdrawal. BJAUT expects to outperform industry growth, driven by sustained gain in market share in 150cc+ motorcycles, EVs and exports. However, we note that its 75-125cc domestic motorcycle segment (~53% of its overall 2W volumes for FY26) has been losing market share. We expect overall volume/blended realization CAGR of 9.7%/3.4% over FY26-28E translating to revenue/EBITDA/EPS CAGR of 13.5%/13.9%/13.3%. Downgrade to ‘HOLD’ with TP of INR10,400 (previously INR10,000), valuing it at 23x (previously 22x) P/E on its FY28 standalone EPS.
