Bajaj Auto hits record high, stock has rallied 65% since January; five things you need to know

Shares of Bajaj Auto—whose popular motorcycles include the Dominar, the Pulsar, and the Avenger—have given over 65 per cent returns to investors year-to-date (YTD), that is, since January 2023. In Thursday's trading session (November 23), the shares gained nearly 3 per cent and clocked a record high of Rs 5,939.05 apiece.

Some reasons for the rally in Bajaj Auto shares are as below.

1. Strong Q2 results 

Bajaj Auto reported a standalone net profit of Rs 1,836.1 crore for the July-September period, a rise of 20 per cent on a year-on-year (YoY) basis that beat analysts' expectations.

The robust quarterly profit came on the back of better sales of margin-boosting three-wheelers and premium motorcycles.

The auto major's revenue from operations grew 5.6 per cent to Rs 10,777.3 crore for the second quarter of the current financial year.

2. Brokerages' bullish views

JP Morgan has maintained an 'overweight' rating and has raised the target price from Rs 6,100 to Rs 6,400.

Morgan Stanley also continued its 'overweight' rating on the stock and has raised the target from Rs 5,449 to Rs 6,229. 

3. Festive-season boost

According to analysts, 125 CC+ bikes saw 50 per cent YoY growth during the festive season, and the overall growth of the company increased by 20 per cent YoY with a gradual recovery in exports.

4. Market share retained in the three-wheeler segment

The company has retained its market share of more than 80 per cent in the three-wheeler segment.

5. Vehicle sales and launches

Triumph Motorcycles sales are better than expected, and the company is focusing on the production and distribution of up to 10,000 units per month.

Analysts expect that Chetak EV will have a strong ramp-up and a new model will be launched next month.

The recently launched Pulsar N150 is doing well, and there are six new launches and upgrades lined up over the next six months to enable further market share gains.

The new Chetak version is slated to launch post-festive season, and the company is targeting further expansion of the range of offerings in this segment.

As per the company, commodity costs are largely under control and are expected to remain stable in the quarter ahead, which is expected to be a tailwind for margins.

Bajaj Auto share price: Past performance

In the past five years, Bajaj Auto shares have given over 115 per cent returns; in a year, the stock has gained over 63 per cent and since January, the stock has rallied over 65 per cent. 

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