Emkay Upgrades Bajaj Auto Shares to Buy Rating, Forecasts 17% Upside

Bajaj Auto Shares received a major boost from Emkay Global Financial Services this week as the brokerage firm upgraded its rating to Buy and projected roughly 17 percent upside from current levels, reflecting growing confidence in the company’s growth prospects in both domestic and export markets. The upgrade from Emkay follows a period of modest share movement and is attracting attention from investors, analysts, and those involved in stock research.

The positive action by Emkay has helped shine a spotlight on Bajaj Auto as an attractive candidate for long-term investors seeking exposure to India’s expanding automotive industry, a key part of the broader stock market ecosystem. While Bajaj Auto is well known in the two-wheeler sector, renewed interest from analysts underscores evolving business dynamics and opportunities ahead.

Emkay’s Rationale for the Buy Upgrade

Analysts at Emkay highlighted several key factors behind the upgrade to a Buy rating on Bajaj Auto Shares. First, the brokerage noted that the stock’s outlook improved after a muted performance in 2025, where the shares delivered only modest gains, prompting investors to reassess future potential. With a revised price target of ₹11,100 per share, the implied upside rests largely on growth drivers that could strengthen financials and improve market positioning.

The upgrade also incorporates higher earnings estimates for the next two fiscal years, reflecting expectations for stronger profitability and operational momentum. Emkay’s adjustments include an earnings per share (EPS) upgrade of around 4 percent for FY27 and 9 percent for FY28, reinforcing the investment case for investors focusing on sustainable earnings growth over time.

Key Drivers of Growth for Bajaj Auto

Export Momentum and Global Reach

A major reason behind the bullish outlook is Bajaj Auto’s strong performance in export markets. Exports have been a key source of revenue growth for the company, with significant demand in regions such as Latin America and Asia. According to Emkay, this sustained demand abroad, combined with favourable currency trends, supports improved profit margins and future revenue streams.

Export strength helps the company diversify away from dependence on domestic sales and adds stability to its top-line performance. For investors conducting stock research, export drivers can signal resilience in earnings and potentially smoother returns even when local markets fluctuate.

Electric Vehicle (EV) Segment Leadership

Another important factor cited by Emkay relates to Bajaj Auto’s expanding footprint in the electric vehicle market. The company has made notable progress in both electric three-wheelers (E-3W) and electric two-wheelers (E-2W). As of late 2025, Bajaj Auto overtook some competitors to become a leading player in the E-3W segment while maintaining a strong position in the E-2W space. This shift toward electrification strengthens the company’s long-term growth story and aligns with broader trends in sustainable mobility.

Electric vehicles are becoming increasingly important in global automotive strategies, and Bajaj Auto’s early leadership could pay off as demand for EVs rises domestically and internationally.

Market Share and Domestic Stability

Domestically, Bajaj Auto is showing signs of stabilising its market share in the two-wheeler segment after a prolonged phase of pressure. Emkay’s analysis points out that overall market share has bottomed out and is beginning to improve, particularly in the premium motorcycle category, where Bajaj has historically been strong.

This recovery is meaningful because regaining share in higher-value segments can contribute to better margins and stronger brand recognition, both important for sustaining long-term growth.

Valuation and Relative Risk-Reward

Valuation metrics also played a central role in Emkay’s recommendation. Bajaj Auto Shares currently trade at a forward price-to-earnings (P/E) ratio that is more attractive compared with some competitors in the automotive sector. This relative valuation supports a compelling risk-reward profile for investors willing to take a long-term view.

For stock market investors, valuation comparisons often provide context for decision-making, especially when considering whether a stock is priced fairly relative to its peers.

What This Upgrade Means for Investors

The Emkay upgrade signals renewed optimism among domestic analysts about Bajaj Auto’s potential to deliver above-average returns in the medium term. A forecasted 17 percent upside suggests room for further capital appreciation, especially if the company continues to execute on its strategic priorities around exports, premium products, and EV expansion.

However, as with all stock market investments, these projections are not guaranteed. Investors should weigh macroeconomic conditions, competitive dynamics in the automotive industry, and sector-wide trends that could impact performance. A balanced approach to analysis helps ensure informed decisions.

Looking Ahead: Opportunities and Risks

Going forward, Bajaj Auto Shares could benefit from stabilising two-wheeler demand in India, continued export growth, and expansion into electric mobility. If these trends materialise as expected, the company’s earnings may strengthen, justifying the Buy recommendation and associated upside potential. Investors focused on quality and growth may view these developments favourably.

Nevertheless, risks such as uneven economic cycles, supply chain disruptions, and changes in consumer preferences could influence outcomes. Broader stock research tools often incorporate macro indicators and market sentiment to balance bullish forecasts with risk awareness.

Conclusion

The recent upgrade of Bajaj Auto Shares to a Buy rating by Emkay Global Financial Services highlights several positive trends behind the company’s prospects. From export momentum and EV leadership to improved domestic market share and attractive valuation, there are multiple growth drivers supporting a potential 17 percent upside forecast.

This move by a respected brokerage firm reflects confidence in Bajaj Auto’s ability to deliver value to investors in the evolving automotive landscape. For those conducting thorough analysis and staying informed on market developments, this upgrade adds a noteworthy perspective in considering investment strategies related to major players in the Indian auto sector.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.