Bajaj Auto Stock: New ₹11,100 Target on EV and Export Boom

Introduction

Emkay Global Financial Services has upgraded its rating for Bajaj Auto to 'Buy' from 'Add', setting a new price target of ₹11,100 per share. This revised target suggests a potential upside of approximately 17% by December 2027. The brokerage's positive outlook is anchored in the company's accelerating momentum in the electric vehicle (EV) sector and a significant recovery in its export markets, signaling renewed confidence in the automaker's growth trajectory.

Rationale Behind the Upgrade

The decision to upgrade Bajaj Auto's stock is supported by a detailed financial analysis. Emkay Global has revised its earnings per share (EPS) estimates upwards by 4% for the fiscal year 2027 and by 9% for FY28. A key component of this re-evaluation is the inclusion of Bajaj Auto Credit, the company's financing arm, which has been valued at ₹300 per share. This comprehensive assessment reflects a belief in both the core automotive business and its expanding financial services vertical, which together are expected to drive shareholder value.

Dominance in the Electric Vehicle Space

Bajaj Auto has firmly established itself as a leader in India's growing electric vehicle market. The company achieved the top position in the electric three-wheeler (E-3W) segment by December 2025, capturing a commanding 31.8% market share and overtaking its primary competitor, Mahindra & Mahindra. In the electric two-wheeler (E-2W) segment, Bajaj Auto has consistently held the second-largest market share for four consecutive months. A crucial milestone for the company is that its EV business has already achieved EBITDA breakeven, indicating a financially sustainable and profitable path in the green mobility sector.

Domestic Market Stabilization

After a period of fluctuation, Emkay Global believes that Bajaj Auto's market share in the domestic two-wheeler segment has likely bottomed out. Data from the third quarter of FY26 shows a sequential improvement, particularly driven by strong demand in the 125cc and premium motorcycle categories. This stabilization suggests that the company's strategies to regain market footing are beginning to yield positive results. The domestic performance is a critical pillar of the company's overall health, and this turnaround is a significant factor in the upgraded rating.

Product Pipeline and Future Strategy

To further bolster its market position, Bajaj Auto is focusing on a robust product pipeline. The company plans to introduce several new and refreshed models, including significant updates to its popular Pulsar and Chetak brands. The launch of a refreshed Pulsar range is slated for the calendar year 2026. These strategic product introductions are expected to attract new customers, retain existing ones, and contribute directly to an improved market share trajectory in the highly competitive domestic market.

Export Market Recovery

Exports remain a cornerstone of Bajaj Auto's business model, accounting for a substantial 44% of its total volume mix. The company is witnessing a strong recovery in key international markets, with Latin America and Asia emerging as significant growth drivers. Emkay anticipates that the company's export revenues will also benefit from currency depreciation tailwinds. This favorable currency movement is expected to enhance overall profit margins, providing an additional layer of financial strength and cushioning the company from domestic market volatility.

Valuation and Peer Comparison

From a valuation perspective, Bajaj Auto appears attractively priced compared to its industry peers. The stock is currently trading at approximately 24 times its forward earnings. This valuation is notably lower than that of its main competitors, providing a compelling investment case.

This favorable valuation, combined with strong growth drivers, suggests that the stock has significant room for appreciation.

Financial Projections and Outlook

Looking ahead, Emkay Global projects a healthy 14% compound annual growth rate (CAGR) for Bajaj Auto's EPS over the period of FY26 to FY28. In addition to earnings growth, the company is expected to offer a dividend yield of 2.7% by December 2027, making it an attractive proposition for both growth and income-focused investors. Furthermore, a gradual operational turnaround at KTM, in which Bajaj Auto holds a significant stake, is expected to provide an additional boost to the company's consolidated financial performance.

Market Performance and Key Metrics

Bajaj Auto's solid fundamentals are reflected in its key financial and market metrics. The company's performance continues to be monitored closely by investors as it navigates the dynamic automotive landscape.

These figures provide a snapshot of the company's scale and current market standing.

Conclusion

Emkay Global's upgrade of Bajaj Auto to a 'Buy' rating is a strong endorsement of the company's strategic direction. The decision is underpinned by its leadership in the EV segment, a resilient export business, and a stabilizing domestic market share. With an attractive valuation and a clear roadmap for future growth through new product launches, Bajaj Auto is well-positioned to capitalize on emerging opportunities in the automotive sector. Investors will be watching closely as the company executes its plans to achieve the projected growth and deliver enhanced shareholder value.