ICE three-wheelers command margins of over 30% and any impact on this segment could accentuate the impact on the company’s profitability, UBS wrote.
Bajaj Auto is the most exposed in the ICE three-wheeler industry with a 87% market share in Maharashtra, according to UBS.The UBS note comes on the lines of the Maharashtra government announcing a temporary stay on the issuance of new auto-rickshaw permits, stating that the policy shift marks a transition from expansion to “saturation management.”
According to the state government, the volumes of three-wheelers have reached a tipping point, and hence the decision.UBS has a “sell” rating on Bajaj Auto with a price target of ₹9,015, which implies a potential downside of 6% from Tuesday’s closing levels.
Three wheelers form more than 18% of Bajaj Auto’s total volumes. Over the last few months, in-line with other segments, the three-wheeler industry has been growing up to 30%.
For Bajaj Auto, as per its February sales data, the domestic three-wheeler sales were up 25% from last year and overall sales in the segment for financial year 2026 so far is 7%.
46 analysts have coverage on Bajaj Auto, of which 27 have a “buy” rating, 11 say “hold”, while eight have a “sell” rating on the stock.
Shares of Bajaj Auto are trading 1.8% lower on Wednesday at ₹9,441. The stock has declined 4.5% in the last one month.
