After months of correction, CLSA turns to say 'Hamara Bajaj!'

Shares of Bajaj Auto Limited have opened as the top gainers on the Nifty 50 index on Thursday, January 9, after the two-wheeler manufacturer was upgraded to 'Outperform' by global brokerage firm CLSA.

The foreign brokerage firm upgraded Bajaj Auto from its earlier rating of 'Underperform'. It has a price target of ₹9,493 on the stock, which implies a potential upside of nearly 10% from Wednesday's closing levels.

CLSA wrote in its note that a steep correction in Bajaj Auto's stock price, coupled with growth in its electric two-wheeler business, has prompted an upgrade.

The stock has corrected by 32% over the past four months and is currently trading at 21x FY27CL earnings, compared to its long-term average of 19x.

In December, Bajaj Auto's market share in the e-2W segment exceeded 25%, driven by the launch of a more affordable variant of the Chetak.

The brokerage said that the company has maintained a 20% margin despite scaling up its e-2W operations, which it believes is a noteworthy achievement.

As opposed to being strong in premium segment, CLSA believes that Bajaj Auto will continue to face rising competition from peers in the executive segment

Meanwhile, another brokerage firm Jefferies has recently reduced its price target on Bajaj Auto to ₹10,350 from ₹13,400 earlier.

Out of the 47 analysts that now have coverage on Bajaj Auto, 24 of them have a ‘Buy’ rating on the stock, 11 of them say ‘Hold’, while the other 12 have a ‘Sell’ rating.

Shares of Bajaj Auto are currently trading 1.42% higher on Thursday at Rs 8,765. The stock has corrected 31% from their peak of Rs 12,774.

Note To Readers

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.