Accumulate Bajaj Auto Ltd. - Kotak

BAL's 4QFY12 results came on expected lines. Company reported revenues of Rs46,514mn a growth of 12.2% YoY. Reported EBITDA margins came in at 19.8% that were 40bps higher than 4QFY11 EBITDA margins of 19.4%. BAL reported net profit of Rs7,720mn that was in line with estimated net profit of Rs7,643mn.

- Going ahead in FY13, the company has targeted volumes of 5mn, ~15% growth over FY12 volumes. In the near term the company expects some pressure on the export volume due to lower volume off-take from Sri Lanka. Management is banking on the new products for growth in the domestic motorcycle market.

- We believe that the volumes both on the domestic and export side will remain under pressure in the near term. However, with new launches and expected demand recovery in Sri Lanka, we expect volumes to improve steadily for BAL in FY13.

- Due to revision in reporting under Schedule 6, a portion of other operating income now forms part of other income. We have accordingly adjusted our FY13 numbers. However the same will not have any impact on our FY13 net profit estimates.

- As stated earlier, volumes could remain weak in the near term adding pressure to the stock. However, we remain positive from the long term perspective and maintain our price target of Rs1,632 and ACCUMULATE rating on the stock.

Source : Equity Bulls

Keywords