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Research Report Detail
|Report Date||Call||Price@Call||Target Price
|Current Status||Time Horizon|
Nomura Maintains Neutral on Bajaj Auto
Nomura has maintained its 'neutral' rating on Bajaj Auto for target price of Rs 2,410. Nomura has increased its target price from Rs 2,144. Nomura expects domestic two-wheeler industry growth to remain in the mid-single digits in FY16F. The competition threat from Honda is likely to persist. The potential increase in scooter mix does not augur well for Bajaj Auto. The company is likely to sustain 10-12% volume growth in the export markets over the next two years.
Nomura adds that Bajaj Auto is not present in the high growth scooter segment, the company needs to continue to gain market share in the motorcycle segment to deliver high growth. This in our view may be difficult. Overall, we expect a volume CAGR of 10% for Bajaj Auto over FY15-17F.