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What should investors do with Bajaj Auto after Q1 results: buy, sell or hold?

Bajaj Auto's Q1 standalone net profit doubled to Rs 1,061.18 crore from Rs 528.04 crore in the year-ago period. The auto maker's revenue more than doubled to Rs 7,386 crore in Q1FY22 against Rs 3,079.2 crore in Q1FY21.

July 23, 2021 / 10:18 AM IST
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Bajaj Auto share price added a percent in the morning session on July 23, data after the company reported a standalone net profit of Rs 1,061.18 crore for the June quarter FY22, up from Rs 528.04 crore in the year-ago period. The auto maker's revenue more than doubled to Rs 7,386 crore in Q1FY22 against Rs 3,079.2 crore in Q1FY21.

Also read: Bajaj Auto Q1 results: Profit, revenue double; motorcycle market share improves to 19.7%

EBITDA for the quarter came at Rs 1,153 crore, while the EBITDA margin stood at 15.6 percent. In the same quarter last year, EBITDA was Rs 441 crore and the EBITDA margin was 14.3 percent. Tax expense came at Rs 321.5 crore against Rs 156.3 crore YoY.

"Q1FY22 has been a challenging quarter; the recovery over the past three quarters got undone with the second wave of COVID-19, which again led to restrictions and full or partial lockdowns. This resulted in weaker domestic demand, which was partially offset with strong exports across all major geographies," the company said in a BSE filing.

The stock was trading at Rs 3,872.70, up Rs 20.10, or 0.52 percent. It touched an intraday high of Rs 3,924.80 and an intraday low of Rs 3,854.60.


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Volumes during the quarter stood at 10,06,014 units. Nearly 3,42,000 motorcycles were sold in the domestic market during the June quarter.

Bajaj Auto's domestic motorcycle market share improved to around 19.7 percent in Q1FY22 against 17 .3 percent in Q4FY21.

As many as 14,000 commercial vehicles were sold in the domestic market. The company said it sold over 6,48,000 units in various international markets during the quarter despite challenges in the availability of containers. By region, Africa, SAME and LA TAM continued to record strong sales.

Here is what global brokerages have to say about the stock and the company after Q1 earnings:

Nomura | Rating: Buy | Target: Rs 4,668

The first quarter was slightly below expectations but export outlook is healthy. The company's focus is on premium portfolio with margin catalysts in place.

Morgan Stanley | Rating: Overweight | Target : Rs 4,550

The earnings were in-line. The company also formed an EV/hybrid focussed subsidiary. A weaker mix was offset by price increases during the quarter.

Citi | Rating: Sell | Target: Rs 3,000

The commodity cost pressures were evident in Q1. Better pricing and lower SG&A expenses partly mitigated the impact on margin. "Concerned about motorcycle product mix and domestic 3-wheeler demand. Reduce earnings estimates by 1-2 percent over FY22-24," it said.

Macquarie | Rating: Neutral | Target: Rs 4,053

The margin was impacted by lower volumes and input cost inflation. Near-term headwinds persist. Exports momentum and gradual domestic recovery will support earnings.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Jul 23, 2021 10:18 am

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