The shares of India’s leading two-wheeler manufacturing companies were in focus in the day’s trade after Jeffries downgraded its shares and cut the target price by upto 37%, check it out.
Price Movement
With the market capitalization of Rs 2.26 lakh crore, the share of Bajaj Auto Ltd is trading at Rs 8110, down by 1.68 percent compared to the previous close of Rs 8110
With the market capitalization of Rs 76,673 lakh crore, the share of Hero MotoCorp Ltd is trading at Rs 3833, down by 2.12 percent compared to the previous close of Rs 3916.55
What Happened
Bajaj Auto and Hero Motocorp engage d in the business of two-wheelers manufacturing companies in India, are in focus after Global Brokerage firm Jefferies downgraded their rating. Bajaj Auto has been downgraded to “hold” from its earlier rating of “buy”.while Hero Moto has had a double-downgrade to “underperform” from its earlier rating of “buy”.
They cut the price target on Bajaj Auto by 28% to ₹7,500 from ₹10,550, and it has given a bigger target cut to Hero, slashing its price objective by 37% to ₹3,200 from ₹5,075 earlier
The reasons for the downgrade
They expect poor industry volume growth estimates for FY26-27 by six percentage points and two percentage points respectively, even as it still expects a 10% Compounded Annual Growth Rate (CAGR) over FY25-28. The brokerage assumes the two-wheeler industry to grow at 8%, 11%, and 11% respectively in FY26, FY27, and FY28
It expects poor EPS growth for Bajaj Auto and Hero Moto in FY26-27 by cutting its Earnings Per Share (EPS) estimates for Bajaj Auto and Hero Moto by 5% and 11%, respectively.
Global brokerage firm Jefferies said that India’s competitive landscape in the two-wheeler industry has changed significantly with TVS Motors’ market share hitting the highest level in 18 years, and exports hitting a new high. On the flip side, Hero’s market share in the domestic two-wheeler market is at a 20-year low.
About the company
Bajaj Auto Ltd. engages in the manufacture and marketing of motorcycles and three-wheeler vehicles. The firm operates through the following segments: Automotive and Investments, and Others. It offers motorcycles, scooters, commercial vehicles, and related spare parts.
Hero MotoCorp Ltd. engages in the manufacture of two-wheelers. Its products include Karizma ZMR, Xtreme Sports, Achiever 150, New Glamour, Super Splendor, and Passion X Pro. It operates through the Domestic and Overseas segments
Financials
Bajaj Auto Ltd reported a revenue of Rs 13,169 crores in Q3 FY25, up by 8.25 percent from its Q3 FY24 revenue of Rs 12,165 crores. It posted a net profit of Rs 2,196 crores in Q3 FY25, up by 8 percent from its Q3 FY24 net profit of Rs 2,033 crores.
Hero MotoCorp Ltd reported a revenue of Rs 10,260 crores in Q3 FY25, up by 4.82 percent from its Q3 FY24 revenue of Rs 9,788 crores. It posted a net profit of Rs 1,108 crores in Q3 FY25, up by 2 percent from its Q3 FY24 net profit of Rs 1,091 crores.
Written By Sanjay G
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
