Bajaj Auto Ltd. share price target

Bajaj Auto sold 13.39 lakh units in the quarter ended Sept 2018, higher by 25% compared with 10.71 lakh units sold in corresponding quarter last fiscal. Motorcycles sales increased 22.6% to 11.26lakh units while commercial vehicle sales rose 39.3% to 2.12 lakh units. While domestic...

Strategy on entry level (M1) segment BAL took price cuts in the entry level segment in Q1FY19 to expand the lower end of market and also to gain market share. As a result, the company recorded a growth of 50% YoY in Q2FY19 as against 27% growth for the industry. CT sold over ~248,000 volumes, a growth of 40% over Q2FY18 and Platina clocked over ~153,000 units, growth of ~47% over Q2FY18. This resulted in market share improvement from 32% in Q2FY18 to ~38% in Q2FY19. BAL plans to occupy 45-50% of the market share in the M1 segment over the medium term....

Subdued Performance; Healthy Exports to Drive Bottom-line Bajaj Auto (BAL) has delivered a subdued operating performance in 2QFY19 with its EBIDTA margin contracting by 292bps YoY and 46bps QoQ to 16.8%. Aided by 24% YoY and 9% QoQ growth in volume to 1.33mn units, its revenue grew by 21% YoY and 7.8% QoQ to Rs78.3bn vs. our estimate of Rs81bn. ASP declined by 2.2% YoY (-1.4% QoQ) led by poor product-mix and price rationalisation. EBIDTA growth came in lower at 3.4% YoY and 5% QoQ due to lower realisation, while PAT increased by 4% YoY and 3% QoQ to Rs11.5bn (vs. our estimate of Rs11.8bn). Higher commodity prices and limited ability to pass on the same led to 327bps YoY and 98bps QoQ...

Bajaj Auto (BJAUT) Q2FY19 result was below our and consensus expectations at operating level. EBITDA margin for the quarter stood at 16.8% vs our and consensus estimates of 17.1% and 17.3% respectively. Net Revenue were above our and in-line with consensus estimates at Rs79.8bn due to weaker domestic realizations. Result Highlights and Investment Rationale Operationally weak quarter: Revenues grew +21.4% YoY/+7.6% QoQ to Rs79.8bn, led by growth of +25% YoY/+9% QoQ in sales volumes to 1.3mn. Net realizations continue to decline for Q2FY19 by -1.4% QoQ due to higher discounting in CT100...

Bajaj Auto (BAL) reported muted performance in Q2FY19 primarily tracking change in product mix with skewness more towards entry level products (CT100 & platina) in the domestic and export markets Total volumes for Q2FY19 stood at 13.4 lakh units (up 25% YoY). Total 2W sales volume in Q2FY19 was at 11.3 lakh units, up 23% YoY while 3W sales volume were at 2.1 lakh units, up 39% YoY. Domestic volume growth was at 19% in the 2W segment & 32% in the 3W segment. Domestic realisations stood at | 61,194/unit in...

Maintain BUY with a SOTP-based TP of Rs 3,174 (17x Sept 20E Core EPS + cash + 40% discount for KTM stake) vs Rs 3,411 earlier. Higher contribution of entry level models (CT 100 and Platina in domestic 2W and Boxer in export) in the sales mix weighed on 2QFY19 margins for Bajaj Auto (BJAUT). Despite 25% volume growth, EBITDA rose only 3.5% YoY at Rs. 13.43bn at a disappointing 16.8% margin (vs est 17.3%). PAT grew by 4%YoY to Rs 11.52bn. Management expects ~150bps margin expansion in FY20 with full-year benefit of rupee depreciation.

Q2 top line excels, margins below expectations Bajaj Auto posted a mixed bag of numbers in Q2 FY19, though volumes in the quarter grew by a handsome 25% yoy and 9.2% qoq to its highest ever quarterly volumes of 1.34 mn units. Despite such a strong show, the realizations dropped by 3% yoy and 1.3% qoq to 58,470/unit. This was a result of adverse product mix where the company sold more volumes of CT 100 and Platina belonging to the mass/M1 segment. This was due to company's strategy of gaining market share in the M1 segment by providing heavy discounts and subvention schemes. As a result of this, EBITDA margins touched lows of 16.8% also thanks to the RM price growth. RM costs as a % of...

Bajaj Auto has introduced an exciting new opportunity in form of 5-5-5 offer to buy Bajaj motorcycles in India. This offer commences from October 5, 2018 where customers get the benefit of five years of free own damage insurance cover, five free services and five years of free warranty on select Bajaj motorcycles (Platina, Discover, Pulsar and the V range of motorcycles) across all dealerships in India at no additional cost. Bajaj Auto is the first in the industry to introduce such an offer through the 5-5-5 scheme. One of the key benefits of this offer is five years of free own damage insurance cover for customers buying these bikes. We believe that...

Company outperformed the industry recording a growth of 19% over Q2 FY18 as against industry growth of 8%. Overall share in the domestic motorcycle market increased to 18.6% as against 16.9% in Q2 FY18. For September 2018, overall share in domestic motorcycle market was...

ICICI Securities Ltd | Retail Equity Research Bajaj Auto reported Q1FY19 results below our estimates on the operational front. Net revenues came in at | 7419 crore (up 36.3% YoY, 9.5% QoQ) against our expectation of | 7979 crore. The miss at the topline level is attributable to lower-than-expected realisations in both the domestic as well as export business Domestic revenues came in at | 4116 crore (up 26.2% YoY, down 3.1% QoQ) vs. our expectation of | 4578 crore while export revenues...