Bajaj Auto - Launches new 100cc vehicle, Discover 100T - Angel Broking

Bajaj Auto (BJAUT) has launched a new 100cc motorcycle, Discover 100T at a price of Rs.50,500 ex. showroom Delhi. The new motorcycle will be powered by the company's DTS-i technology and is likely to deliver 10.2PS of power and offer a fuel efficiency of 87kmpl. The Discover 100T is based on the all new Discover platform through which Discover 125ST has already been launched.

The new motorcycle has been positioned by the company at the upper end of the less than 110cc segment. We expect the launch of Discover 100T along with the existing, Discover 100 to strengthen BJAUT's positioning in the less than 110cc segment.

Currently, BJAUT has ~20% market share in the segment which is dominated by Hero MotoCorp (~70% market share) through its flagship models Splendor and Passion. BJAUT is targeting a market share of ~30% in the less than 110cc segment over the next two years. We believe that the new launch will enable BJAUT to further ramp up its domestic volumes going ahead. The company is already benefitting from the new launches of Discover 125ST (July 2012) and Pulsar 200NS (June 2012) which accounts for ~15% of the company's motorcycle volumes. At the CMP of Rs.2,194 the stock is trading at 17.3x FY2014E earnings which is slightly higher than its historical average. Hence, we maintain our Neutral rating on the stock.

Source : Equity Bulls

Keywords