Bajaj Auto share price fell over 10% in early trade today

Bajaj Auto share price: Following the release of the company’s Q2 earnings on Thursday, October 17, the price of Bajaj Auto’s stock fell by more than 10% in early trading. On the BSE, the shares fell as high as 10.88% to ₹10,352.70 per share.

In the second quarter of FY25 (Q2FY25), Bajaj Auto recorded a standalone net profit of ₹2,005.04 crore, up 9.2% from ₹1,836.14 crore in the same time the previous year.

The car major’s overall operating revenue in Q2FY25 climbed from ₹10,777.27 crore to ₹13,127.47 crore, a 22% rise from the same time the previous year.

In the aforementioned quarter, EBITDA increased by 24.4% YoY to ₹2,652.4 crore from ₹2,122 crore, while EBITDA margin increased by 40 basis points to 20.2% from 19.8%.

Senior Research Analyst at Emkay Global Financial Services Chirag Jain claims that Bajaj Auto’s Q2 earnings were only mediocre due to a decreased Average Selling Price (ASP).

If the current below-par holiday performance continues, Jain said, “the company’s two-wheeler retail growth has been muted, with market share loss in the fast-growing 125cc category; management expects FY25 industry growth to be closer to 5% than 8%.”

Bajaj Auto was downgraded by the brokerage company from “Reduce” to “Sell,” with a revised target price of ₹9,500 per share. This implies a loss of more than 18% from the closing price on Wednesday.

Emkay Global said that it favors TVS Motor Company’s enhanced development possibilities in the two-wheeler market over Hero MotoCorp’s superior risk-reward ratio.

With a target price of ₹7,800 per share, foreign brokerage company Citi has rated Bajaj Auto as a “Sell,” indicating a decline of more than 32%. It thinks that a little shortfall in ASPs and gross margin is what caused Bajaj Auto’s Q2 results to come up slightly short of expectations.

Bajaj Auto’s two-wheeler volume prospects are favorable, according to Nuvama Institutional Equities, which projects an 8% CAGR over FY24–27E driven by 7% and 10% growth in the domestic and export categories, respectively.

“Bajaj Auto’s market share in the electric and CNG vehicle segments is increasing, and in FY27E, it is expected to reach 20% or higher among domestic 2-wheelers. We plan to increase EBITDA by up to 3% for FY25E–27E. Nuvama Equities said, “We are building in revenue/EBITDA CAGR of 12%/15% over FY24–27E with an average RoE of ~36%.”

Maintaining a “Buy” recommendation, it increased the target price for Bajaj Auto shares to ₹13,200 from ₹12,000 previously, based on a 38x core earnings for the Sep-26E (35x before) and ₹814 in cash and investments per share.

It said that a target P/E improvement was the result of a positive outlook and increased presence in the electric and CNG market.

Price of Bajaj Auto Stock

The auto stock fell more than 13% in a single month, resulting in a recent dramatic decline in the price of Bajaj Auto shares. Nonetheless, year-to-date (YTD) gains in Bajaj Auto shares have exceeded 53%, and over the last year, the company has produced multibagger returns totaling over 101%.

Following a steep decline today, the price of Bajaj Auto shares has challenged its 100 Day Moving Average (DMA) at ₹10,328. The stock seems to be forming a base and is in a little oversold area. It is recommended that traders add Bajaj Auto shares gradually and stop losing below ₹10,000. The creator of ChartWizard FZE and Gemstone Equity Research, Milan Vaishnav, said that stop levels have to be between ₹9,800 and 10,000.

Bajaj Auto shares were down 10.77% at ₹10,366.00 a share on the BSE at 10:35 a.m.