Emkay upgrades Bajaj Auto stock to a Buy rating and sees a 17% upside. This is why analysts are bullish

After a quiet 2025, with gains of just 6%, shares of Bajaj Auto rose as much as 3% to the day’s high of Rs 9,783 on Tuesday after Emkay upgraded the stock to Buy from Add, citing robust growth prospects in the coming quarters.With a price target of Rs 11,100 per share, the brokerage has forecast an upside of 17% from current market levels. Here are three reasons why domestic brokers are bullish on the major two-wheeler OEM.

Stabilizing 2W’s market share; premium traction improves

Bajaj Auto’s domestic two-wheeler market share appears to have bottomed out, rising from 10% in Q2 2025 to 10.5% in December 2025, Emkay said in a note earlier today. While domestic motorcycle sales growth has remained in the low single digits over the past fifteen months, performance has been depressed by continued market share losses in the economic segment, which constituted 11% of volumes in Q3FY26TD versus 14% in Q3FY25. That said, a gradual recovery in overall market share is visible, led by 125cc and premium motorcycles, where shares improved from 21.1% and 21.9% in Q2FY26 to 21.9% and 22.2% respectively in Q3FY26TD. number two with a market share of around 19% in December, supported by a sharper focus on newer Pulsar and Chetak models, with three to four launches in the fourth quarter.

Goes beyond M&M into E-3Ws; currency wind supports margins

In the fast-growing electric three-wheeler segment, where penetration stands at around 33% for FY26 and 37% in Q3, Bajaj Auto has overtaken M&M to emerge as the market leader as of December 2025, with an estimated market share of 32%. Export momentum remains healthy, driven by Latin America, Asia and East and Southern Africa. This strong export performance, combined with the depreciation of the rupee, is expected to support the company’s overall margin trajectory, especially given the increased export mix of around 44% in FY26, compared to 39% in FY25.

Attractive risk reward

While Ather and TVS Motor are structurally favored, Bajaj Auto offers the most attractive risk-reward at current levels. The stock trades at a one-year price-to-earnings ratio of around 24x, compared to 38x for TVS Motor and 32x for Eicher Motors. The investment scenario is supported by strong export trends in Latin America and Asia, the planned launch of a refreshed 125cc Pulsar range in CY26, and expectations of a healthy CAGR of 14% per share alongside an estimated dividend yield of 2.7% by December 2027. Furthermore, a gradual turnaround in KTM provides additional upside potential, with overall volume, revenue and EPS CAGR of around 10%, 13% and 14%. Financial year 26E-28E.

(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)