Index Membership and Market Capitalisation Impact
Bajaj Auto Ltd. holds a prominent position within the Nifty 50 index, a benchmark that represents the largest and most liquid stocks on the National Stock Exchange of India. With a market capitalisation of approximately ₹2,71,532.15 crores, Bajaj Auto is categorised as a large-cap stock, reflecting its substantial influence on index movements and investor portfolios.
Its inclusion in the Nifty 50 not only enhances visibility among domestic and global investors but also ensures consistent demand from index funds and exchange-traded funds (ETFs) tracking the benchmark. This status often translates into improved liquidity and tighter bid-ask spreads, factors that are crucial for institutional investors seeking sizeable positions without significant market impact.
Recent Performance and Technical Indicators
On 3 February 2026, Bajaj Auto closed trading just 1.89% shy of its 52-week high of ₹9,883.3, signalling robust price momentum. The stock opened with a gap up of 2.17% and maintained this level throughout the day, touching an intraday high of ₹9,700. Despite underperforming its sector by 0.66% on the day, the stock has recorded consecutive gains over the past two sessions, delivering a cumulative return of 2.26% in this period.
Technically, Bajaj Auto is trading above its key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – indicating a sustained bullish trend. This technical strength is particularly noteworthy given the broader Automobile Two & Three Wheelers sector’s gain of 2.83%, suggesting Bajaj Auto is maintaining resilience amid sectoral volatility.
Valuation and Sector Comparison
From a valuation standpoint, Bajaj Auto’s price-to-earnings (P/E) ratio stands at 29.67, which is below the industry average of 33.35. This relative valuation discount may appeal to value-conscious investors seeking exposure to the automobile sector without overpaying. The company’s market cap grade is rated as 1, reflecting its large-cap stature and stable market presence.
Over the past year, Bajaj Auto’s stock has delivered a 9.04% return, matching the Sensex’s performance over the same period. However, its longer-term track record is more impressive, with three-year returns of 152.19%, five-year returns of 129.23%, and a remarkable ten-year return of 313.75%, all significantly outperforming the Sensex benchmarks of 38.34%, 67.48%, and 247.46% respectively. This performance underscores the company’s ability to generate sustained shareholder value over multiple market cycles.
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Institutional Holding Dynamics and Rating Upgrade
Institutional investors have shown renewed interest in Bajaj Auto, coinciding with its recent upgrade in the MarketsMOJO grading system. On 22 December 2025, the company’s Mojo Grade was revised from 'Sell' to 'Hold', with a Mojo Score of 67.0. This upgrade reflects an improved outlook on the company’s fundamentals and market positioning, signalling a stabilisation after a period of underperformance.
Such rating changes often influence institutional portfolios, prompting fund managers to reassess their allocations. The 'Hold' rating suggests cautious optimism, balancing the company’s strong market presence against sectoral headwinds and valuation considerations. This nuanced stance is critical for investors aiming to navigate the automobile sector’s cyclical nature while capitalising on Bajaj Auto’s leadership in two and three-wheelers.
Sectoral Context and Earnings Trends
The Automobile Two & Three Wheelers sector has seen mixed results in the recent earnings season, with 95 stocks reporting results: 36 positive, 51 flat, and 8 negative. Bajaj Auto’s performance aligns with the sector’s cautious optimism, supported by steady demand in domestic and export markets. The company’s ability to innovate and maintain cost efficiencies remains a key driver of its competitive advantage.
Despite the sector’s overall gain of 2.83% on the day, Bajaj Auto’s slight underperformance by 0.66% may reflect profit-taking or sector rotation by investors. However, its consistent outperformance over longer time horizons and technical strength suggest that the stock remains well-positioned for future growth.
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Outlook and Investor Considerations
Looking ahead, Bajaj Auto’s status as a Nifty 50 constituent will continue to attract institutional flows, especially from passive investment vehicles. Its valuation discount relative to the industry, combined with strong technical indicators, may appeal to investors seeking a blend of growth and stability within the automobile sector.
However, investors should remain mindful of sector-specific risks such as raw material price volatility, regulatory changes, and competitive pressures from emerging electric vehicle manufacturers. The company’s ability to innovate and adapt to evolving market dynamics will be critical in sustaining its leadership position.
In summary, Bajaj Auto Ltd. exemplifies a large-cap stock with a solid track record, enhanced by recent rating upgrades and institutional interest. Its benchmark status within the Nifty 50 index reinforces its importance for portfolio construction, while its performance metrics and valuation profile provide a balanced investment proposition.
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