20 May 2020 Bajaj Autos (BJAUT) strong operating performance was driven by mix and Fx, which supports our view that the company has several levers to protect margins. Volume recovery for both India and exports is expected in 2HFY21, with risk of financing for India and oil prices/Fx devaluation for exports. We downgrade our EPS for FY21/FY22E by 4% as we cut volumes but factor in the favorable Fx. Maintain our rating. 4QFY20 revenue/EBITDA/PAT grew -8%/2%/23% YoY to INR68.2/ INR12.5b/INR13.1b. Realizations grew 10.5% YoY (8% QoQ) to INR68.7k (v/s est. INR64.7k), driven by better mix (higher 3W, exports and premium motorcycles) and Fx. Gross margins improved ~150bp QoQ (+340bp YoY), driven largely by mix, higher share of premium motorcycles and favorable Fx.