LKP Research is bullish on Bajaj Auto has recommended buy rating on the stock with a target price of Rs 3342 in its research report dated July 27, 2020.
LKP Research's research report on Bajaj Auto
Bajaj Auto posted a 61% yoy decline in the topline in COVID hit Q1, while they declined by 55% qoq. The volumes fell by 64.5% yoy and 55% qoq as there was a stringent lockdown observed in the earlier part of the quarter. Realizations grew by 9.8% yoy, which were very well supported by export realizations and a higher proportion of BS 6 vehicles. EBITDA declined by 66% yoy to Rs.4.1 bn, while margins still showed a better performance at 13.3%, much better than streets expectations, though it was lower by 210 bps yoy. The overall underperformane stemming from weak macros was offset by cost savings and favourable foreign exchange. Better than expected operating performance led to PBT falling by 57% yoy to Rs.6.8 bn, while PAT went down by 53% yoy, which was lesser than the PBT fall, to Rs.5.3 bn on lower corporate tax rate at 22.5%.
We maintain our BUY rating on the stock with a target price of Rs.3,342 (at 18x FY 22E earnings).
For all recommendations report, click here
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