Sharekhan's research report on Bajaj Auto
BAL reported better-than-expected operational performance during Q1FY2023, led by higher average sales realisation, improved USD realisation, and better product mix, despite higher input costs. Management remains positive on growth prospects in domestic and export markets. BAL is expected to gain market share across regions, driven by brand recall, product launches, and improving premiumisation of its product portfolio. 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. The stock trades below the historical average P/E multiple of 15.6x and EV/EBITDA multiple of 10.2x its FY2024E.
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