Bajaj Auto Ltd. share price target

Bajaj Autos 2QFY16 APAT at Rs 9.3bn ( 6.5% YoY, -8.1% QoQ) surpassed expectations. Strong domestic Net ASP and muted cost trends led to 130bps QoQ expansion in EBITDA margins to 21.6%.

9 EBITDA margin surprised (21.6%, up 130bps qoq) as the company benefitted from better productandgeography mix. Economy contribution to domestic volumes down 600bpsqoqandexportscontributionup200bps...

and exports markets. New product launches, strong threewheeler volumes (driven by new permits) and aggressive pricing will help the company improve its domestic motorcyclesmarketshare.Recentrupeedepreciationandfallingcommoditypricesgives...

realization declined 10.4% qoq due to weak product mix. EBITDA margin was 20.3%, up 141bpsyoy,but30bpsbelowourestimatesasthecompanypassedoncurrencybenefits to its key export markets of Africa. In FY1415, Bajaj struggled in the domestic two...

Bajaj Autos 1QFY16 EBITDA at Rs 11.4bn was below estimates, largely due to lower topline growth. Overall volumes rose sharply by 29% QoQ. However, net sales at Rs 56.1bn grew at lower pace (18% QoQ) as a result of a sharp 8.5% QoQ drop in blended realisations.

Bajaj Auto (BAL) delivered muted Q1FY16 performance with operating margins and profit coming below our as well as street's estimates. Its revenues/EBIDTA/PAT grew 7%/15%/29% YoY and 18.4%/37%/64% QoQ to Rs 56bn/11.4bn/10.1bn as against our estimate of Rs 61.3bn/12.7bn/9.9bn respectively. Its volume rose 2.5%YoY/29.4%QoQ to 1mn units. Its realization/vehicle improved by 4.6% YoY, which is much lower than estimates, despite higher export contribution, favourable currency and higher 3W contribution. Management cited price rationalization and product mix in overseas markets as key reason behind lower ASP.

Buy at Rs 2,306.4 and add on dips to Rs 2,096 - Rs 2,170 for Target of Rs 2,503 in 1 quarter

Bajaj Autos 4QFY15 APAT at Rs 6.2bn was inline but further adjustment for lumpy expense (higher gratuity charge) depicts better than expected underlying performance. While volumes declined by 21% QoQ, Net ASP rise of 5.4% QoQ led to higher than expected topline of Rs 47.4bn.

Bajaj Auto (BAL) delivered muted Q4FY15 performance with operating margins and net profit coming below our as well as street's estimates. Its revenues/EBIDTA/PAT declined 4%/14%/22% YoY and 16%/28%/23% QoQ to Rs 47.4bn/8.3bn/6.2bn as against our estimate of Rs 45.3bn/8.6bn/6.9bn respectively.