Bajaj Auto, one of India’s leading two- and three-wheeler makers, continues to face headwinds in the domestic motorcycle market despite strong performance in exports and electric vehicles. The brokerage house Motilal Oswal has maintained a ‘neutral’ rating on the stock. The firm has set a target price of Rs 9,070 per share, which translates to a modest upside of around 1%. According to the brokerage, while the company is making moves to recover its position with new launches and operational restructuring, the pace of domestic recovery will be key for investors watching the stock closely.
Let’s take a look at the key reasons behind the brokerage call –
Motilal Oswal on Bajaj Auto: Revenue, profits, and valuation snapshot
Motilal Oswal models a compound annual growth rate, or CAGR, of 12% in revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA), and 11% in profit after tax (PAT) for Bajaj Auto over the period from fiscal year 2025 to 2027. The stock is currently trading at roughly 24.1 times and 21.9 times the estimated earnings per share (EPS) for fiscal year 2027 and 2028, respectively.
“At ~24.1x/21.9x FY27E/28E EPS, Bajaj Auto appears fairly valued,” the brokerage noted, reiterating its neutral stance.
Motilal Oswal on Bajaj Auto: Domestic motorcycle ambitions and exports driving growth
Management has set clear targets to regain market share lost in the domestic motorcycle segment. According to the report, Bajaj Auto plans to launch a new 125cc commuter motorcycle in fiscal year 2027, along with three new Pulsar variants in December 2025, March 2025, and May 2025.
The brokerage expects Bajaj Auto to achieve a 6.5% volume CAGR over fiscal years 2025 to 2027.
“While the demand momentum is likely to remain strong in exports, the recent currency depreciation will also provide a margin cushion for the company in the current quarter,” Motilal Oswal noted.
Motilal Oswal on Bajaj Auto: Electric vehicles and three-wheelers
Bajaj Auto is also making inroads in the electric vehicle, or EV, segment. Its Chetak EV has positioned the company as the second-largest player in India’s electric two-wheeler market.
According to the brokerage report, the upcoming launch of a new Chetak model is expected to move Bajaj Auto closer to the leadership position in the segment. In the three-wheeler, the e-rick model named Riki is projected to support growth in the coming quarters. “Bajaj Auto has already emerged as the second-largest EV player,” the report said.
Motilal Oswal on Bajaj Auto: Post-KTM acquisition restructuring
Following its acquisition of KTM, Bajaj Auto plans to restructure core operations and leverage synergies in manufacturing, supply chain, and distribution. Management intends to exit the bicycle, car, and smaller brand segments to focus on KTM and Husqvarna. According to the brokerage, “H1CY26 will be the year of consolidation/restructuring, and from H2CY26, one can observe operational benefits of these measures.”
While exports, EVs, and three-wheelers provide upside potential, Motilal Oswal pointed out that the loss of market share in domestic motorcycles, especially in the crucial 125cc plus segment, remains a concern.
The brokerage added that although the KTM acquisition is strategic, the effectiveness depends on how quickly Bajaj Auto can improve its operations. Based on the fair valuation of 24 times estimated core EPS for September 2027, the neutral rating is maintained.