BAJAJ-AUTO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Bajaj Auto Ltd, a flagship player in India’s two-wheeler and three-wheeler market. I’m weighing its financial strength, valuation metrics, business model, and technical signals to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹296 — robust earnings base

PAT Qtr: ₹2,096 Cr vs ₹2,049 Cr — +5.41% QoQ, steady growth

ROE: 28.5%, ROCE: 37.6% — excellent capital efficiency

Revenue (FY25): ₹50,994 Cr, Net Profit: ₹8,240 Cr

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Balance Sheet Strength

Debt-to-equity: 0.03 — virtually debt-free

Dividend Yield: 2.31% — attractive for income investors

Book Value: ₹1,151 — price-to-book ratio ~7.88, premium valuation

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 29.9 Slightly undervalued vs industry PE of 33.4

P/B Ratio ~7.88 Premium valuation

PEG Ratio 1.54 Fair — growth justifies valuation

Intrinsic Value ~₹8,500–₹8,800 Trading slightly above fair value

Valuation is reasonable given strong fundamentals and consistent earnings growth.

🏍️ Business Model & Competitive Edge

Industry: Automotive — cyclical but resilient

Moat: Dominance in exports, strong brand equity (Pulsar, Dominar), and innovation in EVs

Catalysts

EV expansion via Chetak

Strong export growth and premium segment traction

Final dividend of ₹210/share announced in May 2025

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Bajaj Auto combines legacy strength with forward-looking innovation.

📉 Technical & Entry Zone

Current Price: ₹9,075

DMA 50/200: Trading above both — bullish trend

MACD: +162 — strong momentum

RSI: 58.7 — neutral to slightly bullish

📌 Suggested Entry Zone: ₹8,700–₹8,900

This range offers a better margin of safety and aligns with technical support levels.

🕰️ Long-Term Holding Guidance

Hold if already invested — fundamentals are excellent

Buy on dips near ₹8,800 for long-term compounding

2026 Target Price: ₹10,450–₹10,500 based on technical projections

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⭐ Fundamental Rating

4.6

Bajaj Auto offers a rare blend of strong financials, brand power, and innovation. Let me know if you’d like a peer comparison with Hero MotoCorp or TVS Motor.

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Moneycontrol

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The Hindu BusinessLine

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