Bajaj Auto Ltd. share price target

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...

Q4FY19 revenue grew by 9%YoY at Rs7,395cr on a sequential basis the revenue has been mostly flat. EBITDA margins came at 15.7% for Q4FY19 contracted 388bps YoY due to a) increase in marketing spends b) higher commodity...

3W volumes were almost flat for Q4FY19 (growth 6% QoQ). Growth in this segment was mainly because of exports (growth 34% YoY). The Company sold the highest ever number of units in the current fiscal. Exports to Egypt may remain under pressure because of regulatory concerns. This may create a hang on the 3W business as Egypt is...

Bajaj Auto (BJAUT) Q4FY19 result was in-line with our and below consensus estimates at operating level. EBITDA margin for the quarter stood at 15.7% vs our and consensus estimates of 15.8% and 16.3% respectively. We expect BJAUT domestic motorcycle sales to decline ~2% in FY20 mainly on account of higher base in commuter segment and weak buyer sentiment. We cut our FY20 revenue and earnings estimates by 1%/6% and introduce FY21 estimates. We have built in revenue/earnings CAGR of 8%/8% over FY19-21E with ROE of ~20% and average free cash flow of ~Rs45bn. We change our rating to REDUCE (earlier ACCUMULATE) and revise our TP to Rs2,670 (earlier Rs2,740)...

Bajaj Auto (BAL) reported steady Q4FY19 numbers with a surprise on ASPs (up 5% QoQ at | 60,533/unit) & exceptional item (| 342 crore) resulting in 21% increase in PAT on a YoY basis. Net revenues came in at | 7,395 crore (up 9.2% YoY). Total volumes for the quarter were at 11.9 lakh units (up 14% YoY) wherein 2-W volumes were at 10.0 lakh units (up 17% YoY) and 3-W volumes were 1.9 lakh units (up 1% YoY). Reported EBITDA margins were at 15.7% (up 11 bps QoQ). PAT in Q4FY19 grew 20.9% YoY to | 1,306 crore. PAT was higher supported by | 342 crore as exceptional gain realised in...

Bajaj Auto (BJAUT) reported strong set of numbers in subdued environment as Net sales stood at Rs 74.5bn (+9% YoY / -0.7% QoQ). Realizations were at Rs 62.5k (-4.5% YoY and +4.8% QoQ) on superior product mix led by strong export sales. Gross margins at 28.4% (-300bps YoY/ +20bps QoQ) were impacted by continued pricing disruption in entry level motorcycles (CT100 and platina). The exports volumes continued to grow stronger led by Africa, Indonesia (+13% YoY) which boosted the realizations on QoQ basis. The adjusted EBITDA margin stood at 16.5% (-380bps YoY/+31bps QoQ) and were impacted by higher staff costs (+17%...

We re-iterate BUY as (1) Bajaj's market share is back to 25% in motorbikes (earlier seen in CY16) (2) They will launch new variants particularly in the executive segment to increase share in the domestic segment (3) The margins are stabilizing at current levels. Bajajs adj. 4QFY19 PAT at Rs 10.7bn (-1% YoY) was inline with our estimates. We expect Bajaj to grow ahead of the market in FY20 as well driven by new launches across its product range. Our revised TP is Rs 3,330 (based on its long term ten year average PE multiple of 17.5x on FY21E earnings). While the two wheeler industry growth has been benign, Bajaj has expanded market share by recalibrating its strategy. Further, the company has a diversified product portfolio with three wheelers and exports accounting for ~50% of volumes. Re-iterate BUY.