As Bajaj Auto Ltd unveiled the world’s first CNG bike Bajaj Freedom 125, analysts consider the mannequin ought to see volumes of 10,000 models per 30 days within the second half of FY25 and 20,000 models per 30 days in FY26. The CNG mannequin ought to supply higher value of possession compared to petrol bikes and may appeal to cost-conscious clients, they stated as they see powertrain getting tailored for a number of engine displacements forward.
This could improve CNG demand within the medium time period, as Bajaj Auto launches CNG fashions within the 100cc and 110cc segments and different two-wheeler OEMs play a catch up. Nuvama has upped its goal costs for Mahanagar Gasoline Ltd, Indraprastha Gasoline Ltd and Gujarat Gasoline Ltd by 9-17 per cent and retained ‘Purchase’ on all three, within the pecking order of MGL, Gujarat Gasoline and IGL. It additionally elevated its goal value for Bajaj Auto. Bajaj Auto is the highest two-wheeler choose for international brokerage Nomura India.
“We proceed to acknowledge Bajaj Auto’s progressive strategy throughout segments. The corporate might have a headstart of 2-3 years over its competitors if its CNG bikes begin gaining market share. Equally, we stay optimistic on the corporate’s 2W EV potential, too, which may ramp up far more this yr in our view. We preserve Bajaj Auto as our prime 2W choose,” Nomura India stated.
Bajaj Freedom 125 will likely be out there at ex-showroom value of almost Rs 95,000. This compares with friends Tremendous Splendor and Shine 125, which have beginning mannequin value at Rs 80,848 and Rs 79,800, respectively. For now, the Bajaj Auto administration expects whole market at round 6,00,000 models, with CNG availability at 60 per cent, making the whole addressable market at 3,60,000 models.
“We estimate CNG mobike whole value of possession to be 28-30 per cent decrease than EVs totally on larger preliminary prices versus CNG mobikes and, therefore, payback interval for electrical MCs at a tall ask of three.6–7.4 years. “Freedom” has an authorized mileage of 102km/kg however we retain conservative assumption of 80km/kg to think about non-optimal driving situations. Our base case estimates 1–2 per cent development in FY26E and 5–13 per cent uptick in incremental CNG quantity by 2030,” Nuvama stated.
Nuvama has a revised goal value of Rs 1,957 on MGL, suggesting a 15 per cent upside potential. It urged a brand new goal of Rs 598 on IGL, suggesting 14 per cent potential upside. Nuvama’s Gujarat Gasoline goal value of Rs 740 hints at 15 per cent upside forward.
“Even sans contemplating incremental quantity from CNG MCs, managements of all three CGDs have guided for six–12 per cent YoY quantity development in FY25 led by double-digit I/C development (MGL, IGL) and CNG development (GGL). We elevate TP for MGL, IGL, GGL by 9–17 epr cent as we incorporate larger CNG quantity from FY26 onwards. We minimize capex for GGL because it plans to fee CNG stations by way of its FDODO scheme. We minimize FY25E/26E Ebitda by 1–20 per cent for MGL, GGL and lift it by 2–4 per cent for IGL as we rationalise near-term margins,” it stated.
For Bajaj Auto, Nuvama expects income and Ebitda CAGR of 12 per cent and 15 per cent over FY24–26, with common return on fairness of 35 per cent. “All in all, we preserve ‘BUY’ with a goal value of Rs 12,000 (earlier Rs 10,340) based mostly on 35 instances Sep-26E core earnings together with money/investments of Rs 876 per share,” it stated.
Disclaimer: Enterprise As we speak offers inventory market information for informational functions solely and shouldn’t be construed as funding recommendation. Readers are inspired to seek the advice of with a certified monetary advisor earlier than making any funding choices.
