Bajaj Auto Limited

Consumer Cyclical — Auto Manufacturers · NSE

₹10,405.00+₹20.00 (+0.19%)

DalalBaazaar Score

82 / 100

🟢 Strong

Verdict

ATTRACTIVE

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Bajaj Auto Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Bajaj Auto Limited, together with its subsidiaries, engages in the development, manufacture, and distribution of automobiles in India and internationally.

IndustryAuto Manufacturers

SectorConsumer Cyclical

Employees5,231

Annual revenue₹60,386 Cr

How does it make money?

Turns over ₹60,386 Cr a year. Of every ₹100 of sales, about ₹18 reaches shareholders as profit, with ₹26 left at the operating level before interest, tax and depreciation. Each of its 5,231 employees supports ₹11.54 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin26.3%

Net margin17.8%

Revenue / employee₹11.54 Cr

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TATA MOTORS LIMITED, TATA MOTORS PASS VEH LTD, MAHINDRA & MAHINDRA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TATA MOTORS LIMITEDP/E 37.1x · ROE 32.8%

TATA MOTORS PASS VEH LTDP/E — · ROE -3.0%

MAHINDRA & MAHINDRA LTDP/E 17.8x · ROE 19.7%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 26.1%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 27.7% against a peer median of 19.7% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE26.1%

ROE27.7%

Peer median ROE19.7%

What is the outlook?

38 analysts covering the stock expect revenue to grow about 14.0% and earnings to grow about 11.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.0%

Est. earnings growth+11.2%

Analysts38

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +71% while net margin moved +4% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+71%

Margin effect+4%

DalalBaazaar Score

82/ 100

Strong

Weighted across six categories. Every point is explained below.

• P/E of 24.7x is within a normal band
✓ P/E is 26% below its own historical median of 33.5x — cheap by its own standards
✗ P/B of 7.49x is a steep premium to book

Quality vs. Valuation

Company Quality

86/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

61/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

24.7x

3Y Median

33.5x

40 monthly readings · mean 34.3x · range 21.7x–45.5x

Sector Median

25.2x

median of 3 sector peers

🟢Current valuation is approximately 26% below its 3y median of 33.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 25.2x.

vs. its own history

Cheap

33.5x median over 40 months · -26%

vs. sector peers

Fair

25.2x median of 3 peers · -2%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

24.7x

P/B

7.49x

EV/EBITDA

19.2x

PEG

1.18

Dividend Yield

1.44%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 22.3% to 26.3% over 3 years.
Return on equity is rising
ROE has improved from 20.6% to 27.7%.
High return on capital employed
ROCE of 26.1% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 24.7x the stock trades 26% below its own median of 33.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Receivables growing faster than sales
Receivables are up 98% against revenue growth of 71% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 303% against revenue growth of 71% — stock may not be moving.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Inventory building faster than salesFinancial
Inventory up 303% against revenue up 71% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 98% against revenue up 71% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 26.1% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 22.3% to 26.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 26% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 98% against revenue up 71%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 15% a year✓ 19.5% CAGR
Latest reported year was 64.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 24%✓ 26.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹1,874 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 23%✓ 26.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

11 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

8 good · 2 neutral · 1 weak

Market Cap

₹2.86 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

24.7x

Fair

Fairly valued against the generic band

P/B Ratio

7.49x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹420.5

Profitable

Profitable on a per-share basis

ROE

27.7%

Strong

Strong capital efficiency

ROCE

26.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.56x

Low

Conservative leverage

Revenue Growth (YoY)

64.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

45.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.44%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹1,874 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹10,405

P/E (Forward)

21.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

21.5%

Good

Healthy core-business profitability

Net Margin

16.3%

Good

Strong bottom-line conversion

Current Ratio

1.76

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.66

Defensive

Steadier than the market

52W Range Position

47%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

10580.6 / 11294.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

33.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹35,392 Cr	₹43,782 Cr	₹49,267 Cr	₹60,386 Cr	+19.5%
EBITDA	₹7,897 Cr	₹10,049 Cr	₹10,500 Cr	₹15,889 Cr	+26.2%
EBITDA Margin	22.3%	23.0%	21.3%	26.3%	—
PAT (Net Profit)	₹6,060 Cr	₹7,708 Cr	₹7,325 Cr	₹10,744 Cr	+21.0%
EPS	₹212.5	₹272.4	₹262	₹384.4	+21.8%
ROE	20.6%	26.6%	20.8%	27.7%	—
ROCE	26.4%	33.4%	24.9%	26.1%	—
Total Debt	—	₹1,786 Cr	₹9,237 Cr	₹22,640 Cr	—
Free Cash Flow	₹4,167 Cr	₹5,829 Cr	-₹2,279 Cr	₹1,874 Cr	-23.4%

🟢 Revenue has grown at 19.5% a year over 3 years.

🟢 EBITDA has grown at 26.2% a year over 3 years.

🟢 EBITDA Margin has risen from 22.3% to 26.3% over 3 years (+4.0 pts).

🟢 PAT (Net Profit) has grown at 21.0% a year over 3 years.

🟢 EPS has grown at 21.8% a year over 3 years.

🟢 ROE has risen from 20.6% to 27.7% over 3 years (+7.0 pts).

🟡 ROCE has held roughly flat at 26.1% over 3 years.

🔴 Free Cash Flow has shrunk at 23.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹77,223 Cr

Total Liabilities

₹37,003 Cr

Total Debt

₹22,640 Cr

Cash & Equivalents

₹2,990 Cr

Operating Cash Flow

₹2,597 Cr

Capex

-₹722 Cr

Shareholding (proxy)

Institutional Holding

16.7%

Insider Holding

61.0%

Corporate Actions

Next Earnings

27 Oct 2026

Dividend Rate

₹150

Ex-Dividend Date

29 May 2026

Analyst Consensus

Recommendations

29 Buy · 5 Hold · 7 Sell

Target Price (Mean)

₹11,680.88

+12.3% vs CMP

Target Range

₹9,259 – ₹13,700

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TATA MOTORS LIMITED	37.1x	32.8%
TATA MOTORS PASS VEH LTD	—	-3.0%
MAHINDRA & MAHINDRA LTD	17.8x	19.7%

Recent News

1 mixed5 general

Bajaj Auto's Weak Domestic Two-Wheeler Sales In September Weigh On Stock Price

NDTV Profit, 01 Oct

Explained - Why Auto stocks, led by Bajaj fell up to 8% after their September sales numbers

CNBC TV18, 01 Oct

Bajaj Auto, M&M, Hero Moto skid up to 6%; here's why auto stocks are down

Business Standard, 01 Oct

Why is Bajaj Auto stock tumbling today? By Investing.com

Investing.com India, 01 Oct

Is Bajaj Auto the Best Stock in Its Sector? A Look at the Numbers

Univest, 15 Oct

Why Bajaj Auto Share Price is Falling

Equitymaster, 01 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong16.7/20

🟢Financial HealthStrong16.6/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong12.9/15

🟡ValuationFair9.1/15

🟢RiskLow8.5/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 15% a year19.5% CAGR
✓EBITDA margin holds above 24%26.3%
✓Free cash flow remains positive₹1,874 Cr
✓Debt / EBITDA stays below 2x1.4x
✓ROCE stays above 23%26.1%