Prabhudas Lilladher's research report on Bajaj Auto
BJAUT results look better at Revenue/EBITDA/PAT where EBITDA margin came in at 18.4% (PLe 16.2%), expanding 50bp QoQ. The beat in margin was led by higher realizations at Rs68.7k/unit (PLe Rs63.7k/unit) aided by favorable mix and forex movement. We have slashed FY21/22 eps estimates by 5.3%/2.6% as we cut sales by 11%/8% due to uncertainties in both domestic and exports volumes (both in 2W and 3W).
Outlook
BJAUT is already experiencing financing issues in domestic 3W segment. Additionally, 2W exports are likely to dent due to sharp currency devaluation and decline in crude oil prices. With favorable valuation (FY21/22 at 17x/14.4x) and limited downside, we maintain Hold rating on the stock with revised price target of Rs2,504 (earlier Rs2,554, 14x FY22 EPS).
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