ICICI Direct has given Hold recommendation for Bajaj Auto with a target price of Rs. 4350 in its research report issued on Jul 23, 2021

ICICI Direct’s research report on Bajaj Auto

Bajaj Auto (BAL) is the second largest motorcycle manufacturer and largest 3-W OEM domestically (FY21 market share at 18%, 50.6%, respectively). Exports comprised ~52% of FY21 volumes; >125 cc motorcycles constituted ~28% of FY21 volumes with Pulsar 125 enjoying good success Strong b/s with ~Rs 20,000 crore surplus cash on books, history of >20% return ratios & one of the highest dividend yields among Nifty stocks


We downgrade from BUY to HOLD on margin pressures, EV transition risk  We value BAL at Rs 4,350 on SOTP basis (22x PE on FY23E standalone EPS, 2x P/B on KTM investment; earlier target price Rs 4,500)



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