Bajaj Auto Ltd. share price target

Q3 EBITDA was in line with estimates (4% above consensus). Topline beat (on superior mix) was offset by weaker-than-expected EBITDA margin (commodity cost impact, lumpy CSR). PAT was below estimate due to Rs 800 mn M2M loss on treasury income (notional; will reverse).

The company witnessed drop in margins during the quarter. Profits were short of estimates. Profit was estimated at Rs 1,058.82 crore for the quarter. Blended realization during the quarter grew 6.9% to Rs 63,630. The company witnessed 130bps drop in its operating margins during the quarter ended Dec 17 to 19.3% leading to 18% rise in operating profit to Rs1230.61 crore. The OPM during the quarter fell due to higher raw material and employee cost. The raw material costs including traded goods cost, as % to sales net stock adjusted, rose 230 bps to 62.14%....

New launches The company launched New Discover 110 and Discover 125 and the all new Avengers- Cruise 220 and Street 220 in January 2018. The company is in the process of launching one more Avenger in the next 15 days. As per the management,...

ICICI Securities Ltd | Retail Equity Research Bajaj Auto reported its Q3FY18 results, which were below our estimates on the operational front. Net Revenues stood at | 6369 crore (up 25.7% YoY/ down 3.2%QoQ) against our estimates of | 6097 crore. The beat is attributable to higher than estimated realisation. (~| 62371 against estimates of | 59799; domestic ASPs were higher as the company took price hike in November) Total volumes for Q3FY18 stood at 1001469 units (up 18% YoY/...

Bajaj Auto (BJAUT) reported 3QFY17 results earnings were lower than our and consensus expectations. Net Revenue were above our and consensus estimates due to better product mix, higher realization in export market and recent prices hikes. EBITDA margin for the quarter stood at 19.3% vs our and consensus estimates of 19.9% and 20% due to higher other expenses (increase in CSR activities and one time software expenses of Rs280 mn and Rs200 mn respectively) whereas Adj. Pat for the quarter stood at Rs9.5 bn lower than our and consensus estimates of Rs10.3bn anRs10.7 bn due to lower other income and higher tax rate....

Below Par Performance Retain SELL;During Q3FY19, Bajaj Auto Ltd (BAL) sales grew 25.7% YoY to Rs63.7bn, driven by 17.6% volume growth and a 0.9% increase in average realizations. EBITDA margins declined by 127bps yoy to 19.3% on account of higher CSR and one time registration charges the Company incurred during the quarter.

Maintain BUY with a SOTP-based TP of Rs 3771 (18x 20E Core EPS + cash + 30% discount for KTM stake) vs 3598 earlier. Bajaj Autos (BJAUT) 3Q EBITDA at Rs. 12.3bn (+18% YoY) with margin at 19.3% (-127 bps YoY/-40 bps QoQ) was below estimates owing to adverse 2W mix (higher share of CT and Platina). Net revenue at Rs 63.7bn (+26% YoY) driven by 18% volume growth and 7% increase in net realization (higher 3W and export).

New launches and export recovery to drive growth Q3 FY18 in line with expectations Bajaj Auto posted better than expected numbers at the topline as 17.6% yoy growth in volumes and 1% rise in realisations led to an 18.7% growth at the top line. This was on the back...

Favorable mix drives realization growth of ~4% QoQ: Net sales increased25.7% YoY (-3.2% QoQ) to INR63.7b (est. of INR62.1b), as volume grew 17.6%YoY (-6.5% QoQ). Realization improved by 3.6% QoQ (+6.9% YoY) to INR63.6k(est. of INR62k) due to a favorable mix (higher share of 3W, exports). EBITDA margin miss led by higher CSR, one-time expense: EBITDA grew 18%YoY to INR12.3b (in-line), implying an EBITDA margin of 19.3% (-130bp YoY, -40bp QoQ; est. of 20%). Higher CSR spend (INR280m) and one-time expense related to new SAP licenses (INR200m) resulted in higher-than-estimate do the rexpense, driving an operating performance miss. Lower other income (due to MTM loss of INR800m) and consequently a higher tax rate (31% v/s est. of29%) restricted PAT to INR9.5b (+3% YoY, -14% QoQ; est. of INR10.5b)

Bajaj Auto had a tough last 5-6 years due to weakness in exports and domestic 2Ws. Consequently, even after 7% volume growth in FY18 (to ~3.9 mn) its volumes are 8-10% below FY12/13 levels.