Seminal year for industry provides interesting insights However, amid all the gloom, the engineering and production prowess of the industry (along with its value chain) shone brightly as it successfully completed the world's fastest switchover to Euro 6 equivalent emission norms i.e. BS-VI as per schedule. Much of the post festive period was focused on the transition, with the entire ecosystem estimated to have spent ~| 70,000 crore towards the technological leap. Covid-19 crisis struck India in the run up to April 2020, just as the changeover...

We upgrade our rating from HOLD to BUY with a Target Price of Rs 3,300 (earlier 2,850) valuing it at 16x (earlier 17x) FY23E PE ratio (including Rs 120/share for its stake in KTM) which gives an upside of ~8% from current levels.

Bajaj Auto is the world's sixth-largest manufacturer of motorcycles and the second-largest in India. It is also the world's largest three-wheeler manufacturer. The company is based in Pune, Mumbai with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttarakhand. Bajaj Auto...

Numbers bottomed out in Q1, heading towards recovery Resilience displayed in pandemic hit quarter Bajaj Auto posted a 61% yoy decline in the topline in COVID hit Q1, while they declined by 55% qoq. The volumes fell by 64.5% yoy and 55% qoq as there was a stringent lockdown observed in the earlier part of the quarter. Realizations grew by 9.8% yoy, which were very well supported by export realizations and a higher proportion of BS 6 vehicles. EBITDA declined by 66% yoy to 4.1 bn, while margins still showed a better performance at 13.3%, much better than street's expectations, though it was lower by 210 bps yoy. The overall underperformane stemming from...

ICICI Securities: Increased cash market activity is expected to boost broking revenue by 16.3% YoY in FY21E. We believe this would be cyclical, and as volatility and retail participation recede, we expect ISEC's market share to drop back to ~8%. We remain concerned about discount brokers acquiring a higher share in active clients and believe the yields would remain pressured. We expect a muted year for distribution income (-10.7% YoY) as average MF assets and life insurance sales could remain subdued. We expect the C/I ratio to improve substantially to 50.8% in FY21E, driving FY21/22E PAT growth of 18.5/3.9% YoY. Given the highly cyclical nature of the business, we are concerned that we may be closer to peak earnings and worry that the market may be ascribing a closer-to-peak multiple. We maintain a REDUCE rating with a target price of Rs 540, i.e. 25x FY22E EPS. Bajaj Auto: While the COVID lockdown in Apr-20 has impacted Bajaj Autos 1Q PAT (-53% YoY, -60% QoQ), the OEM has witnessed a sharp pick-up in 2W domestic volumes in Jun/Jul-20 with retail activity in the current month expected at 85% of normal levels. Further, exports are holding up better than expected as activity in most markets is between 75-100% of normal levels. However, the higher value 3W segment (over 20% of revenues) remains adversely impacted (20% of normal) and is unlikely to revive soon as school activity and office-related travel are yet restricted. We reiterate our ADD rating as the outlook remains mixed. We tweak our estimates lower by...

Strong operational beat; exports hold the key Bajaj Auto's 1QFY21 earnings of Rs5.28bn is ahead of our estimate of Rs4.9bn, driven by strong operating performance. Total income is down ~60% YoY at Rs31.12bn and tad below our estimate of Rs31.56bn due to a lower than expected ASP growth of 9.7% YoY. EBITDA margin has been reported at 14.2%, down 180bps YoY and 470bps QoQ. The beat on our expectation was mainly due to tight cost control measures and lower marketing & ad spends, aided by better forex realizations and better product mix within motorcycles partially offset by higher commodity prices. On the current situation, the management commented that 95% and 84% of the domestic 2W and 3W...

Bajaj Auto reported a dismalQ1FY21 but along expected lines. Revenue declinedby ~60% YoY at Rs3079cr (v/s our est. of Rs 3078 cr). EBITDA came in at Rs409cr ahead of our estimates on better Gross Margins (up 460 bps YoY). EBITDA margin was at 13.3% (down ~220 bps YoY and 510 bps QoQ)

Finacing concerns for domestic 3Ws to continue as owners are only earning ~30-40% of the normal business per days. No conern on 2W so-far. BJAUT results were operationally better with positive surprise on EBITDA margins at 13.3% (-220bp YoY, PLe 12.5%) led by three year high gross margins at 32.9% (+470bp YoY, PLe 32%). The beat was led by favorable forex impact. However, Adj.PAT came in lower at Rs5.3b (-53% YoY, PLe Rs6.2b) due to lower other income. With weak product mix (higher domestic share)...

Bajaj Auto Q4 results, net profit flat at Rs 1,310 crore; still beats Street estimates. Bajaj Auto posted 0.36 per cent year-on-year (YoY) rise in consolidated net profit at Rs 1,310.29 crore for the quarter ended March 31. Bajaj Auto had reported a net profit of Rs 1,305.59 crore in the corresponding quarter last year. It's quarterly profit remained largely flat as exports partially offset its sales decline in India after the coronavirus pandemic stalled operations and dealt another blow an already struggling automobile sector....

Bajaj Auto (BJAUT) Q4FY20 result was above our and consensus estimates at operating level. EBITDA margin for the quarter stood at 18.4% vs our and consensus estimates of 16.3% and 15.8% respectively. We expect 2W industry to see a double digit decline in FY21 driven primarily by adverse impact of the COVID-19 outbreak on economic growth and discretionary spending. The challenges for the 2W segment are likely to get aggravated as consumer spending will be severely impacted by the outbreak resulting in lower spending power both in urban and rural markets. We believe BJAUT being a major player in 250cc segment could see muted sales for Pulser/Avenger/KTM etc. We...

We re-iterate our ADD rating on the stock, while we expect volumes in the high growth export markets (which are ~45% of vols) to decline in FY21E. A diversified product mix and healthy balance sheet will cushion the impact of the volatile macro environment. Bajaj Autos 4Q PAT (flat/4% YoY/ QoQ) beat was driven by a richer product mix as well as improved profitability. Going ahead, as the environment will remain uncertain, the management expects margins to correct from ~18% levels of 4Q. The OEM will pass on the benefits of a weakening INR to aid demand, particularly in the African markets.

Bajaj Auto reported a resilient Q4FY20, with all round beat. Revenues were down 8% (v/s expectation of 15%), Gross Margin was up 340 bps (YoY) on account of better product mix and favourable currency.

Diverse product strategy and exports hold the key Bajaj Auto's 4QFY20 earnings of Rs13.1bn is well ahead of our estimate of Rs9.1bn, driven by better than expected operating performance. Total income is down 8.6% YoY at Rs68.56bn and above our estimate of Rs66bn, driven by a higher than expected ASP growth of 10% YoY. EBITDA margin has been reported at 18.9%, up 200bps YoY and 60bps QoQ. The beat on our expectation was mainly due to better mix towards 3Ws, exports and sports segment...

Bajaj Auto's (BJAUT) Q4 operating performance was well ahead of estimates.

Bajaj Auto posted a strong set of numbers in Q4 FY20, as a volume fall 0f 17% yoy was quite arrested by a 10.1% hike in realizations on a better product mix and benign hike in input costs. The topline fell by 8% yoy and 11% qoq. Better realizations, steady forex benefits, RM costs tailwinds led to an 8 quarter high EBITDA margins at 18.4% up from 15.7%/17.9% yoy and qoq respectively. RM costs to sales ratio fell to 70.6% from 74% yoy and 71.8% qoq leading to a robust margin performance. Other income grew by 23%, while depreciation grew by just 4%. On 24% tax rate, net profits zoomed up by 36% yoy to 13.1 bn. On a qoq basis, they grew by 4%. Covid -19 impact to be seen in H1 FY 21, all hopes on H2.....

The festivals started on a slow note, but History indicates a strong correlation between weak oil & impact on its exports (FY16 & picked up during the last few days of FY17). We think this will repeat in FY21e as well & expect ~27% YoY degrowth in exports. Navratri/Dussehra post clarification on GST,...

The deep economic impact of the Covid-19 disruption has brought about a role reversal in our immediate and medium term expectations for the auto sector. Earlier, the PV segment was seen outperforming on the back of rising premiumisation content and an expanding UV portfolio. However, with income levels and ensuing propensity to spend under pressure now in the wake of the pandemic, we feel the 2-W space would now be the frontrunner in coming quarters. Within 2-W, rural-heavy motorcycle sub-segment is expected to lead the charge owing to (i) relatively lower Covid-19 outbreak...

Finacing concerns for domestic 3Ws although no conern on 2W so-far. 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). BJAUT is already...

Bajaj Auto Limited (BAL) Q4 FY20 results were ahead of our as well as street estimates on account of better realisations per vehicle, driven by a better product mix and higher export realisations. Favourable currency movement and soft commodity prices helped margins beat estimates. Going ahead, the two-wheeler industry is likely to witness faster recovery driven by higher rural exposure. A strong rabi harvest, expectations of good monsoon and the government's recent reforms to open end markets for farmers would boost farm incomes and in turn, two-wheeler demand....

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.