BAJAJ-AUTO - Fundamental Analysis: Financial Health & Valuation

📈 Positive

• ROCE of 37.6% and ROE of 28.5% — exceptional capital efficiency and shareholder returns.
• EPS of ₹296 — strong earnings per share supports valuation.
• Low debt-to-equity ratio of 0.03 — reflects financial prudence and stability.
• Dividend yield of 2.36% — attractive for income-focused investors.
• MACD positive at 44.7 and RSI at 46.8 — neutral to bullish technical indicators.
• DII holding increased by 0.77% — signals domestic institutional confidence.

⚠️ Limitation

• P/E ratio of 29.4 vs industry average of 39.0 — moderately undervalued but not cheap.
• PEG ratio of 1.51 — suggests valuation is slightly ahead of earnings growth.
• Book Value of ₹1,151 vs current price of ₹8,903 — high P/B ratio.
• FII holding declined by 0.64% — indicates foreign investor caution.
• Volume below average — may reflect short-term cooling in market interest.

📉 Company Negative News

• Stock corrected ~12.6% from its 52-week high of ₹10,190.
• FII outflows amid global auto sector volatility and valuation concerns.

📢 Company Positive News

• Q2 PAT rose to ₹2,096 Cr from ₹2,049 Cr — steady earnings growth.
• Strong export performance and new EV launches driving future growth.
• Stock up 58.5% over the past year — robust investor returns.

🏭 Industry

• Automobile sector is rebounding with demand from domestic and export markets.
• Industry P/E of 39.0 — Bajaj Auto trades at a discount, offering relative value.
• EV transition and premium segment expansion are key growth drivers.

🧾 Conclusion

• Business Model: Leading two-wheeler and three-wheeler manufacturer with strong export footprint and innovation in EVs.
• Competitive Advantage: Brand strength, cost efficiency, and diversified product portfolio.
• Entry Zone: ₹8,500–₹8,800 — near DMA 50 and technical support.
• Long-Term Holding: Suitable for investors seeking stable growth and dividend income with a 3–5 year horizon.