BAJAJ-AUTO - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

Here’s a detailed review of Bajaj Auto’s financial profile, valuation metrics, strategic positioning, and long-term outlook

🧾 Core Financials & Profitability

EPS: ₹262 — strong earnings indicating consistent profitability.

Quarterly PAT: ₹1,802 Cr (vs ₹2,196 Cr) — a slight dip (–10.4%) but still solid.

ROE: 22.8% and ROCE: 28.1% — impressive, reflecting effective use of capital and strong return generation.

Debt-to-Equity: 0.27 — comfortably low; adds to financial stability.

Dividend Yield: 2.58% — attractive for income-seeking investors.

💸 Valuation Indicators

P/E Ratio: 31.1 — on par with the industry average; implies fair valuation.

P/B Ratio: ~6.45 (₹8,128 ÷ ₹1,260) — high, but justified by solid fundamentals.

PEG Ratio: 2.99 — signals overvaluation relative to earnings growth. Indicates caution unless growth outlook improves.

Intrinsic Value: Likely marginally lower than current price due to subdued momentum and high PEG.

🛵 Business Model & Competitive Edge

Sector: Leading player in two-wheelers and three-wheelers — domestic and global.

Strengths

Strong brand equity (Pulsar, Dominar, etc.).

Cost efficiency and robust export presence.

Well-managed operations with high margin retention.

Risks

Short-term profit pressure.

Increasing competition from EV startups.

FII holdings dipped (–1.31%) — might reflect near-term bearish sentiment.

📉 Technical Indicators

RSI: 41.4 — nearing oversold zone; potential reversal brewing.

MACD: –64.2 — bearish trend still dominant.

Volume: Lower than weekly average — signals investor caution or passive phase.

🎯 Suggested Entry Zone

₹7,750 – ₹8,050: Favorable range closer to support and below DMA levels.

Look for technical reversal signs (MACD crossover or RSI uptick) before entry.

🕰️ Long-Term Holding Strategy

Ideal for a 3–5 year investment horizon

High ROE/ROCE and solid earnings base.

Transition into EV and premium segments can unlock new growth.

Strong export performance and macro tailwinds in auto demand.

If you want me to compare Bajaj Auto with its sector peers like TVS, Eicher, or Hero MotoCorp, I’d be happy to build a comparative dashboard.

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