Bajaj Pulsar NS200 | Rs 1.30 lakh | The Bajaj Pulsar NS200 may not be a fan favourite, but it is still up there with some of the best bikes in this category.
Shares of Bajaj Auto gained 6.4 percent intraday on May 21 after March quarter earnings surpassed analysts' expectations.
While maintaining buy call on the stock and raising price target to Rs 3,000 (from Rs 2,800 earlier), global brokerage CLSA said Q4 results were significantly better than its and consensus expectations.
Earnings derived comfort from the company's margin resilience and strong free-cash-flow conversion, the research house feels. CNBC-TV18 reported.
Hence, CLSA increased its FY21/22 EPS estimates by 6-7 percent.
The two-and-three-wheeler maker Bajaj Auto on May 20 reported a 0.4 percent year-on-year growth in Q4 standalone profit at Rs 1,310.3 crore on revenue of Rs 6,815.85 crore that declined 8.1 percent.
Profitability was supported by lower tax rate and higher other income, but there was a high base in the year-ago period and lower sales volumes (down 16.9 percent YoY) which caused a moderate growth in earnings.
In Q4 FY20, EBITDA margin stood at 18.4 percent (up 185bps YoY, up 50bps QoQ), led by favourable mix and exchange rate.
Japanese brokerage Nomura also said Bajaj Auto's Q4 was a beat with healthy margin outlook from currency benefit and price increases.
"We expect volume recovery in the second half. we maintain buy call and raised price target to Rs 3,030 per share," it added.
Kotak Institutional Equities also has a buy rating with a target at Rs 3,000 per share as EBITDA was above its estimates,
"The near-term will remain challenging for domestic and export markets, but the company will maintain operating margin in these challenging times," the brokerage said.
JM Financial which has also maintained a buy call on the stock with a target at Rs 2,850 per share said, "While 50 percent of the dealerships have re-opened, overall retail sales stand at 25 percent of the normal levels. Shift towards personal mobility will support volumes albeit at a gradual pace starting in the second half of FY21."
The management anticipated two-wheeler exports to relatively outperform domestic two-wheeler sales. JM Financial has factored in a 20 percent YoY decline in domestic 2-wheeler sales in FY21, as financing for entry-level products may become a constraint in the near-term.
However, the brokerage believes that domestic two-wheeler sales should normalise by FY22. "Given the successful track record of product intervention by Bajaj Auto in the last few years, it is best placed to navigate the current environment. We estimate revenue / EPS CAGR of 3 / 4 percent over FY20-22," it said.
However, Emkay Global and Prabhudas Lilladher have a hold rating on the stock with a target at Rs 2,629 and Rs 2,556 per share respectively.
The stock was quoting at Rs 2,697.25, up Rs 139.20 or 5.44 percent on the BSE at 09:45 hours IST.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.