Sharekhan's research report on Bajaj Auto
The stock trades below the historical average P/E multiple of 15.3x and EV/EBITDA multiple of 10x its FY2024E. BAL reported better-than-expected operational performance during Q4FY2022, led by higher average sales realisation, improved product mix, improved USD realisation, and deferral of material cost increase. Management remains positive on growth prospects, especially exports, where BAL expects to further strengthen its market share across regions, driven by brand recall, product launches, and improving product mix. We expect BAL’s earnings to report a 24% CAGR during FY2022-FY2024E, driven by a 15.3% revenue CAGR and a 250-bps improvement in EBITDA margin from 15.9% in FY2022 to 18.4% in FY2024E.
We maintain our Buy rating on Bajaj Auto Limited (BAL) with an unchanged PT of Rs. 4,800, factoring strong business outlook and comfortable valuations.