Bajaj Auto on April 29 is expected to report muted growth in the March quarter profit due to weak margin performance, but double-digit growth in volumes and rising average realisation may drive revenues.
"We expect revenues to increase by 19 percent YoY led by (1) 18 percent YoY increase in volumes and (2) 1 percent YoY increase in average selling price (ASPs) in Q4FY21," said Kotak Institutional Equities which sees 1.1 percent YoY increase in profit for the quarter.
Volumes during the quarter increased by 18 percent YoY led by 24 percent YoY increase in export motorcycle volumes and 21 percent YoY increase in domestic motorcycle volumes, offset by 12 percent YoY decline in three-wheeler segment volumes in Q4FY21.
According to Prabhudas Lilladher, the realisations are expected to increase 3 percent YoY (led by higher mix of 125CC segment, higher 3-wheelers share and price hike). Consequently, revenue is expected to grow around 22 percent YoY, and profit growth could be 1.9 percent, the brokerage said.
The operating income is also expected to see double-digit growth but higher raw material prices could hit margin growth.
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"We expect EBITDA (earnings before interest, tax, depreciation and amortisation) to increase by 15 percent YoY due to 19 percent YoY increase in revenues leading to operating leverage benefits, offset by input cost pressure in Q4FY21, while margin may contract 47 bps YoY," said Kotak.
Prabhudas Lilladher expects EBITDA to grow 19 percent YoY, but margin to decline 40 bps YoY to 18 percent due to higher raw material prices.