Bajaj Auto Surges Nearly 5% As Brokerages Back Growth After Q1 Beat

Shares of Bajaj Auto surged nearly 5% on Wednesday after the two-wheeler maker's June-quarter earnings reinforced analysts' confidence in its growth outlook, with brokerages highlighting a margin-led earnings beat despite commodity cost pressures and pointing to strong export recovery, resilient domestic demand and an active product pipeline as key growth drivers.

The stock gained 4.72% to hit an intraday high of ₹10,900. It had ended 1.13% lower at ₹10,403.50 on Tuesday after the company announced its quarterly results.

The stock has gained 18% so far in 2026, outperforming the Nifty 50, which has declined 7.5% during the same period. Bajaj Auto currently commands a market capitalisation of more than ₹2.91 lakh crore.

On Tuesday, Bajaj Auto reported a 45.9% year-on-year rise in consolidated net profit to ₹3,225.63 crore for the quarter ended June 30, 2026. Its consolidated revenue from operations rose 65% year-on-year to ₹21,688.83 crore, reflecting healthy demand across domestic and overseas markets.

Motilal Oswal Upgrades Stock

Following the earnings announcement, Motilal Oswal Financial Services upgraded Bajaj Auto to 'Buy' from its earlier rating and raised its target price to ₹12,096 per share, implying an upside of more than 16% from Tuesday's closing price.

The brokerage said the company delivered a margin-led earnings beat, which has strengthened confidence in its outlook across business segments.

It highlighted management's expectation that monthly export volumes could increase to around 2.5 lakh units from the second quarter onwards, supported by healthy demand across international markets.

Motilal Oswal also pointed to Bajaj Auto's strong cash generation during the quarter. Free cash flow doubled year-on-year to ₹2,300 crore, representing nearly 80% cash conversion of profit after tax, indicating healthy operational efficiency and balance sheet strength.

The brokerage believes the combination of improving exports, resilient domestic demand, healthy margins and strong cash generation positions the company well for sustained earnings growth over the coming quarters.

Jefferies Sees Better Margins, Product Pipeline

Jefferies maintained its 'Hold' rating on Bajaj Auto with a target price of ₹11,500 per share. The brokerage said the company's EBITDA and profit after tax were 5-7% ahead of its estimates, largely due to stronger-than-expected operating margins.

According to Jefferies, EBITDA margin expanded by 10 basis points sequentially, despite severe commodity cost headwinds during the quarter, reflecting the company's pricing discipline and cost management initiatives.

The brokerage also noted that domestic two-wheeler demand remained resilient while exports continued to recover strongly, providing multiple growth drivers going forward.

Jefferies further highlighted Bajaj Auto's upcoming product launches, saying the company plans to introduce two new motorcycles under the Pulsar brand by September, along with two entirely new brands during FY27, which could further strengthen its market position across premium and mass-market segments.

Reflecting the stronger-than-expected quarterly performance and improved business outlook, Jefferies raised its FY27-FY29 earnings per share estimates by 6-8%.

Brokerages broadly agreed that while commodity costs remain a challenge, Bajaj Auto's ability to expand margins, generate strong cash flows, sustain export momentum and refresh its product portfolio places it in a favourable position for continued growth, helping the stock outperform the broader market after the June-quarter results.