LKP Research is bullish on Bajaj Auto has recommended buy rating on the stock with a target price of Rs 3641 in its research report dated February 05, 2017.
LKP Research's research report on Bajaj Auto
Bajaj Auto posted better than expected numbers at the topline as 17.6% yoy growth in volumes and 1% rise in realisations led to an 18.7% growth at the top line. This was on the back of low base of last year and recovery in the exports markets. Although domestic volumes declined 6.5% YTD, exports volumes grew by 11.3% YTD on strong surge in markets like Nigeria, ASEAN countries and other African markets. Margins came in at 19.7% as RM prices grew yoy as metal prices and other expenses grew on higher CSR expenses at ₹400 mn. Lower other income and higher tax rate at 31.1% with lower benefits from PN plant led to net profits slightly lower than street expectations at ₹9.52 bn which was 14% lower yoy.Outlook
We maintain BUY rating on the stock with a rolled over target price of ₹3, 641 on FY20E, more or less maintaining our FY18E and FY19E estimates.
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