BAJAJ-AUTO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | BAJAJ-AUTO | Market Cap | 2,94,611 Cr. | Current Price | 10,543 ₹ | High / Low | 10,785 ₹ |
| Stock P/E | 29.9 | Book Value | 1,251 ₹ | Dividend Yield | 1.42 % | ROCE | 38.6 % |
| ROE | 29.3 % | Face Value | 10.0 ₹ | DMA 50 | 9,897 ₹ | DMA 200 | 9,354 ₹ |
| Chg in FII Hold | -0.02 % | Chg in DII Hold | 0.28 % | PAT Qtr | 2,718 Cr. | PAT Prev Qtr | 2,549 Cr. |
| RSI | 60.9 | MACD | 233 | Volume | 2,18,231 | Avg Vol 1Wk | 3,26,031 |
| Low price | 7,858 ₹ | High price | 10,785 ₹ | PEG Ratio | 1.42 | Debt to equity | 0.00 |
| 52w Index | 91.7 % | Qtr Profit Var | 32.6 % | EPS | 352 ₹ | Industry PE | 27.7 |
📊 Financial Overview: Bajaj Auto demonstrates strong fundamentals with ROCE at 38.6% and ROE at 29.3%, supported by a debt-free balance sheet (Debt-to-equity 0.00). Quarterly profit rose from ₹2,549 Cr. to ₹2,718 Cr. (+32.6%), reflecting robust earnings growth. Cash flows remain healthy, and profitability is consistent, highlighting operational efficiency.
💹 Valuation Indicators: The stock trades at a P/E of 29.9 compared to the industry average of 27.7, suggesting slight overvaluation. With a book value of ₹1,251, the P/B ratio is ~8.4, which is relatively high. PEG ratio of 1.42 indicates growth is somewhat aligned with valuation. Intrinsic value appears close to the current market price of ₹10,543, making it fairly valued.
🏢 Business Model & Competitive Advantage: Bajaj Auto operates in the automobile sector, leveraging strong brand recognition, global exports, and diversified product lines in motorcycles and three-wheelers. Its competitive advantage lies in scale, innovation, and cost efficiency, making it one of the leading players in the industry.
📈 Entry Zone & Long-Term Guidance: Current price ₹10,543 is near fair value. A better entry zone would be closer to ₹9,800–₹10,000, aligning with DMA support. Long-term holding is favorable given strong profitability, debt-free operations, and global market presence.
Positive
- ✅ Strong ROCE (38.6%) and ROE (29.3%) indicate efficient capital use.
- ✅ Debt-free balance sheet ensures financial resilience.
- ✅ Quarterly profit growth (+32.6%) highlights operational strength.
Limitation
- ⚠️ P/E (29.9) slightly above industry average (27.7).
- ⚠️ P/B ratio (~8.4) is relatively high.
- ⚠️ Dividend yield (1.42%) is modest compared to profitability.
Company Negative News
- 📉 FII holding decreased by -0.02%, showing slight reduction in foreign investor confidence.
- 📉 RSI at 60.9 indicates nearing overbought levels.
Company Positive News
- 📈 DII holding increased by 0.28%, reflecting domestic institutional support.
- 📈 MACD at 233 highlights bullish momentum.
Industry
- 🏭 Automobile industry P/E at 27.7, slightly lower than Bajaj Auto’s valuation.
- 🏭 Sector growth driven by exports, rising domestic demand, and innovation in EVs.
Conclusion
🔎 Bajaj Auto is financially strong with high returns, debt-free operations, and consistent profit growth. Valuation is slightly above peers but not excessive. Entry should be considered near ₹9,800–₹10,000. Long-term holding is favorable given its strong market positioning and global expansion strategy.
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