Bajaj Auto Ltd. share price target

New launches and festive season provide a ray of hope In the domestic MC business, Bajaj launched CT 110 and Platina 110 variants in June-July. They contributed bulk of the CT and Platina sales. Q2 reported a big fall in domestic MC sales at 25% yoy, while in H1, it fell by 12% yoy. With BS VI implementation around the corner, the company...

Management has guided margins that margins could be bottoming out if raw material prices don't fluctuate much. Rise in fixed cost may weigh on earnings in a difficult macro environment. The outlook on the motorcycle industry still remains weak but Bajaj Auto...

Bajaj Auto (BJAUT) Q1FY20 result was tad below our and consensus estimates at operating level. EBITDA margin for the quarter stood at 15.4% vs our and consensus estimates of 15.7% each. We expect BJAUT domestic motorcycle sales to decline ~4.5% in FY20 mainly on account of higher base in commuter segment and weak buyer sentiment. We marginally increase our FY20/FY21 volume estimates by 1.9%/0.5% respectively, mainly on account of higher volume from export market. We increase our revenue and earnings estimates for FY20/FY21 by 2.5%/1% and 6%/4% respectively on account of lower RM cost and lower promotion expenses. We have built in...

Bajaj Auto (BAL) reported a steady Q1FY20 performance. Net revenues came in at | 7,756 crore, up 4.5% YoY. Revenues grew higher than the 2% YoY volume growth to 12.5 lakh units given higher blended ASP of | 62,187/unit. The 2-W volumes were up 5% YoY to 10.8 lakh units while 3W volumes were down 16% YoY to 1.6 lakh units. Total exports were at 5.5 lakh units, up 2% YoY. EBITDA margins were at 15.4%, down 27 bps QoQ. BAL realised a marginal softening in input costs during Q1FY20. However, higher employee and other expenses as a percentage of sales dented...

year. Bottomline would have dropped more if not for rise in other income. Bajaj Auto sold 12.47lakh units in the quarter ended June 2019, higher by 1.7% compared with 12.26 lakh units sold in corresponding quarter last fiscal. Motorcycles sales increased 5.1% to 10.82lakh units while commercial vehicle sales dropped 16.3% to 1.64lakh units.While...

During Q1FY20, Bajaj Auto Ltd (BAL) sales grew by 3.9% YoY to Rs77.6bn (above estimates of Rs74.7bn) EBITDA margins reduced by 249bps YoY to 15.4% (our estimates were 15.6%).

Re-iterate BUY as (1) After regaining market share in the motorbike segment in FY19 (to 25%), Bajaj is launching a new product in the mid-segment to strengthen its position, (2) Margins are bottoming out at ~15-16% (3) Bajaj has robust return ratios with ROEs of ~20% and healthy free cash flows. Bajajs 1QFY20 PAT (Rs 11.3bn, +1% YoY) was inline. After gaining market share in FY19, we expect further gains from Bajaj in FY20, driven by new launches. The OEM is well equipped for BSVI given existing supplies to KTM. Further, its diversified product portfolio (3W/exports are ~50% of volumes) provides cushion against volatility in domestic 2Ws. Re-iterate BUY, with a TP of Rs 3,000 (based on 10-year avg P/E of 17.5x on FY21E EPS).

In-line; industry dynamics challenging; expects margin to stabilize at 15-16% Weaker mix, higher cost impact profitability: Revenues grew 4% YoY to INR77.5b (our estimate: INR75.7b). Despite the weak mix, realizations were flat QoQ (+2.2% YoY) at INR62k/unit (our estimate: INR60.7k) due to favourable FX and price increases for ABS. EBITDA margin shrank 250bp YoY (-110bp QoQ) to 15.4% (our estimate: 15.5%) due to the weaker mix and higher other expenses (higher marketing and CSR spend), partly offset by currency tailwinds. Higher other income and lower depreciation led to adj. PAT growth of 1% YoY to...

With margin at 15.4% (lower 250bps YoY / 90bps QoQ), Bajaj Auto's (BJAUT) Change in Estimates | Target | Reco Q1FY20 operating performance missed estimates (PLe: 16.3%). BJAUT's strategy to gain market share in the domestic motorcycle segment might have...

Bajaj Auto's (BJAUT) 1QFY20 EBITDA was ` 12bn (-6.5% YoY) and margins was 15.4% (-182 bps YoY/-27bps QoQ), broadly in line with our estimates. The management expects 2W industry volume to remain subdued in the near-term, due to challenging macro conditions, we however expect BJAUT to outperform the industry's growth rate. We maintain our positive stance, given its 1) wide product portfolio and diversified geographical mix, 2) continued boost of distribution network, and 3) strong cash balance (22% of current market cap). However, margin recovery is unlikely in the...