Prabhudas Lilladher's research report on Bajaj Auto
BJAUT’s 3QFY21 revenues were in-line while there was ~6.6%/6% beat at EBITDA/adj. PAT. This was led by continued tight cost control. EBITDA margins expanded 150bp YoY at 19.4% (PLe 18%) helped by better gross margins at 29.2% (PLe 28.5%) due to favorable mix. While near term outlook looks positive given 1) healthy exports momentum both for 2W/3W and 2) likely beneficiary of RoDTEP scheme, the same is reflected in valuations. We raise FY22/23 EPS by 4%/8.6% to factor in for sharp increase in KTM profits and better export outlook.
We retain Hold with revised TP of Rs3,489 (v/s Rs3,215, 17x Mar-23 EPS). BJAUT trades at 20x/18x FY22/23 EPS (v/s 18x 5yr LPA).
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