Brokerage firm BofA Securities has upgraded Bajaj Auto to a ‘Buy’ rating with a price target of ₹10,700 per share.
The brokerage said valuations are reasonable, positioning two wheelers as a defensive bet in the current macro environment. It added that better pricing discipline, along with export and foreign exchange tailwinds, could offset any slowdown in growth.
BofA also believes that the risk of cuts to net margins and earnings per share is limited. Higher crude prices, it said, could act as a tailwind for exports to markets such as Africa, particularly Nigeria, as well as for the electric vehicle business.
The brokerage remains positive on Hero MotoCorp and Eicher Motors.
JPMorgan said that while the risk of supply disruptions appears to be easing, commodity inflation is likely to weigh on the sector in the first quarter of financial year 2027 and beyond.
It has cut its financial year 2027 earnings per share estimates by 2% to 16% across its coverage, with relatively smaller cuts for financial year 2028.
However, the brokerage said that the Nifty Auto index has declined 9% since the start of the conflict, compared to a 6% decline in the Nifty, with some stocks returning to levels seen before the Goods and Services Tax cuts.
JPMorgan prefers Maruti Suzuki, Mahindra and Mahindra, Hero MotoCorp, and TVS Motor Company, and has upgraded its stance to ‘Overweight’ from ‘Neutral’.
It has downgraded Apollo Tyres to ‘Neutral’ from ‘Overweight’, with a revised price target of ₹445 from ₹570 earlier.
The brokerage has also upgraded Escorts Kubota to ‘Neutral’ from ‘Underweight’, with a price target of ₹3,175.
Key factors to watch
1. Crude, gas and metal move
2. Supply-chain and production
3. Demand momentum post price hike
4. New launches
