Whalesbook
Nuvama's Optimistic View
Nuvama is bullish on both Hero MotoCorp and Bajaj Auto, maintaining 'Buy' ratings for each. For Hero MotoCorp, Nuvama set a price target of Rs 6,000, suggesting a 17% potential upside. The brokerage anticipates increased sales volume and a stronger product mix, noting Hero's move beyond basic commuter bikes into premium segments and electric vehicles (EVs). Nuvama projects earnings per share to grow by roughly 5% annually between fiscal years 2026 and 2028, backed by solid free cash flow and its Battery-as-a-Service for EVs.
For Bajaj Auto, Nuvama raised the target price to Rs 11,600, indicating a 15% potential upside. The firm expects robust earnings growth fueled by exports and premium motorcycles, plus gains in its three-wheeler and EV businesses. Nuvama forecasts volume to climb by approximately 10% annually from FY26 to FY28, with domestic sales rising 8% and exports 12%.
Nomura's Cautious Assessment
Nomura, however, holds a more cautious view, rating both companies 'Neutral'. For Hero MotoCorp, Nomura forecasts 6% volume growth in fiscal year 2027, largely from exports. It flags potential profitability concerns and risks from rising fuel prices, which could affect its 100cc segment. Nomura has also lowered its earnings margin forecasts, citing inflationary pressures and geopolitical uncertainties.
Regarding Bajaj Auto, Nomura sees export momentum as a major positive, increasing its FY27-FY28 export volume estimates by 4%. Growth could be bolstered by the Chetak electric scooter and new model introductions. Still, Nomura warns that immediate profit margins might be squeezed by rising commodity costs and the expiry of Production Linked Incentive (PLI) benefits.