Geojit Investments Limited has issued a HOLD recommendation on Bajaj Auto Ltd (BAJAJ-AUTO), India's second-largest motorcycle maker and the world's top three-wheeler producer, with a 12-month target price of Rs. 9,780 against a current market price of Rs. 8,989, implying a modest 9% upside. The Q2FY26 results update highlights robust 18.8% year-on-year revenue growth to Rs. 15,735 crore, fueled by export-led volume surges and premium segment strength, alongside EBITDA margin expansion to 22%. While domestic sales dipped amid festive dynamics, management eyes 15-20% export growth in FY26, tempered by supply-chain hurdles in EVs; revised FY26E/27E earnings reflect cautious optimism amid valuation at 27.2x FY26E PE.

Robust Q2FY26 Performance Signals Resilience

Revenue Acceleration: Consolidated topline surged 18.8% YoY to Rs. 15,735 crore, propelled by a 16.7% rise in automotive revenues to Rs. 15,256 crore on 5.9% higher volumes of 1,294,120 units. Investment and financing income leaped 83.1% to Rs. 1,055 crore, underscoring diversified cash flows.

Profitability Surge: EBITDA climbed 30.5% to Rs. 3,463 crore, with margins expanding 200 basis points to 22%, bolstered by operational efficiencies and topline momentum. Reported PAT rocketed 53.2% to Rs. 2,122 crore, aided by 44.2% other income growth and a 4.1% tax dip, translating to adjusted EPS of Rs. 76.

Export Momentum Overshadows Domestic Softness

Volume Dynamics: Exports drove growth, up 24% YoY to 553,327 units across Latin America, Africa, and Asia, while domestic volumes slipped 5% to 740,793 amid supply constraints in two- and three-wheeler EVs. Premium bikes and commercial vehicles thrived on festive tailwinds, with three-wheeler strategies poised to capture surging middle-India transport demand.

Strategic Milestones: Bajaj Brazil hit 8,000+ unit sales quarterly, with October retail exceeding 3,000; KTM-Triumph duo notched record 60,000+ bike billings, up 70% YoY. Spares business expanded 21% to Rs. 1,800 crore, and Bajaj Auto Credit's AUM crossed Rs. 14,000 crore with 2 lakh new customers.

Revised Projections Reflect Prudent Outlook

Geojit trimmed FY26E revenue to Rs. 59,025 crore (-0.6%) and FY27E to Rs. 65,632 crore (-2.7%), with EBITDA margins steady at 20.4-20.5%. Adjusted PAT forecasts stand at Rs. 9,199 crore (FY26E) and Rs. 10,509 crore (FY27E), yielding EPS of Rs. 329.4 and Rs. 376.3, respectively, supporting a 26x FY27E multiple for the Rs. 9,780 target.

Key Financial Trajectory: Management anticipates sustained export vigor at 15-20% for FY26, complemented by e-rickshaw launches and GST reductions, though EV scaling remains bottlenecked.

Valuation and Risk-Adjusted Levels for Investors

Support and Resistance Framework: At Rs. 8,989 CMP, the stock finds near-term support at Rs. 8,500 (50-day EMA confluence) and stronger at Rs. 7,088 (52-week low), with resistance at Rs. 9,471 (52-week high) en route to the Rs. 9,780 target. A break above Rs. 9,200 could accelerate toward Rs. 10,000 on export beats; conversely, sub-Rs. 8,300 risks testing Rs. 7,800.

Investor Targets: Long-term holders target Rs. 9,780 (9% upside) by FY27E earnings delivery; swing traders eye Rs. 9,500 partials on festive volume pops. Dividend yield at 2.3% adds ballast, with ROE projected at 24.3% FY26E amid low 0.5x debt-equity.

Shareholding Stability Amid Market Cap Milestone

Promoters hold steady at 55%, with FIIs at 9.7% and MFs/institutions at 12.8% as of Q2FY26. Market cap stands at Rs. 251,012 crore, beta 1.1 signaling moderate volatility; six-month absolute return of 3.7% lags Sensex by 1%, reflecting relative underperformance but Q2 momentum pivot.

Strategic Imperatives: EV portfolio maturation, Brazil localization, and premiumization will dictate outperformance versus industry peers, positioning Bajaj Auto for calibrated growth in a fragmented auto landscape.