Motilal Oswal: Bajaj Auto management confident on new launches, export

Following a recent meeting with Bajaj Auto management, Motilal Oswal has maintained its 'Neutral' rating on the Bajaj Auto stock with a target price of ₹9,070. While management expressed confidence in new product launches to regain domestic motorcycle market share and outlined ambitious plans for electric vehicle (EV) leadership, the brokerage emphasises that the loss of market share in domestic motorcycles, particularly in the 125cc+ segment, remains a key concern. The effectiveness of the KTM turnaround will also be crucial monitorable.

New launches to tackle domestic motorcycle share loss

A key concern for Bajaj Auto has been its declining market share in the domestic motorcycle segment, Motilal noted. However, management conveyed plans to aggressively counter this trend with a slew of new launches:

 

• A new 125cc commuter motorcycle is slated for launch in FY27.
• Three new Pulsar variants are scheduled for December 2025, March 2026, and May 2026.
• The company also plans "intervention" in the Dominar brand and will introduce a 350cc Triumph variant.
• Recently launched KTM brands, including Adventure, Super Moto, and Duke 160, are also expected to contribute.

Motilal Oswal projects a 6.5 per cent volume compound annual growth rate (CAGR) over FY25-27E for Bajaj Auto, driven by these initiatives.  ALSO READ | Motilal Oswal retains 'Buy' on 360 ONE WAM, sees 18% upside; here's why

Export momentum sustained by Latin American growth

Management reported a significant milestone in exports, surpassing 200,000 units per month recently—a feat achieved after 40 months. This recovery comes despite the key Nigerian market operating at less than 50 per cent of its peak.

• Latin America has emerged as the largest export market for Bajaj Auto, driving this growth.
• Management expressed optimism about the ramp-up in Brazil and Mexico, which are expected to sustain the export momentum.
• Furthermore, recent currency depreciation in export markets is anticipated to provide a margin cushion in the coming quarters.

Aiming for EV leadership with Chetak and Riki

Bajaj Auto is making significant strides in the electric vehicle (EV) space, with management highlighting its ambition for leadership.

• The company has already become the second-largest 2W EV player on the back of healthy demand for its Chetak scooter.
• Another Chetak launch next year is expected to propel Bajaj Auto towards a leadership position in the segment.
• Notably, Bajaj Auto is positioned to be the only player on the verge of achieving Earnings before interest, tax, depreciation and amortisation (Ebitda) break-even in 2W EVs in Q2.
• In the 3W EV segment, the recently launched e-rickshaw 'Riki' is expected to drive growth in the coming quarters.

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Post-KTM buyout: Focus on synergies and restructuring

Following the acquisition of a controlling stake in KTM, management indicated that H1CY26 will be dedicated to the consolidation and restructuring of KTM's core operations. The strategy involves leveraging synergy benefits across nanufacturing operations, the supply chain and the distribution network.

 

Bajaj Auto plans to exit non-core businesses such as bicycles, cars, and other smaller brands to focus on the KTM and Husqvarna brands. Operational benefits from these measures are expected to be visible from H2CY26, noted Motilal Oswal.

 

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