Systematix has raised its target price for Bajaj Auto to ₹12,498 following the second-quarter results for fiscal 2027. The brokerage points to resilient export performance and better profitability in electric vehicles. Investors should monitor how the company manages costs as key government incentives approach their expiry.
Bajaj Auto's latest financial results for the second quarter of the 2027 fiscal year have prompted a change in expectations from analysts at Systematix. The brokerage firm has raised its target price for the two-wheeler and three-wheeler manufacturer to ₹12,498, compared to its previous estimate of ₹12,425. This update follows a review of the company's current business trajectory and its recent investment activities in Bajaj Mobility AG.
The brokerage highlights two main areas supporting this outlook: the company's export franchise and its electric vehicle business. Bajaj Auto remains a significant player in the export market, and the ability to maintain momentum in these regions is viewed as a vital driver for future earnings. Furthermore, the report notes that the company’s electric vehicle segment is showing signs of improved profitability. This is a critical area to watch, as the firm aims to balance its cost structure while navigating the eventual expiration of government incentives under the Production Linked Incentive scheme.
During the second quarter, the company managed to offset pressure from rising raw material and input costs by using strategic pricing and benefitting from favorable currency movements. These tactics helped protect profitability despite a difficult environment for cost management.
However, investors should consider the broader business context. The two-wheeler industry faces intense competition, especially in the electric vehicle space from rivals like TVS Motor and other emerging players. Additionally, the company’s reliance on export markets means it remains exposed to global economic fluctuations and demand changes in overseas territories. As the firm continues its expansion, the primary monitorables for shareholders will be the sustainability of export volume growth, the actual improvement in electric vehicle margins, and the company's ability to maintain its market share against increasing competition.