Bajaj Auto - 3QFY2013 Result Preview - Angel Broking

Bajaj Auto (CMP: Rs.2,118/ TP: -/ Upside: -)

Bajaj Auto (BJAUT) is scheduled to announce its 3QFY2013 results today. We expect the company's revenues to register a healthy growth of ~8% yoy (~9% qoq) to Rs.5,405cr owing to ~5% yoy (~8% qoq) growth in volumes and ~4% (~2% qoq) yoy growth in net average realization. We expect the net average realization to benefit from better product-mix and favorable foreign exchange rate on the exports front.

On the operating front, EBITDA margin is expected to improve ~30bp sequentially (down ~100bp yoy) to 18.7%, benefitting from better productmix and export realization. As a result, the bottom-line is expected to grow by ~9% yoy. Nonetheless, it is expected to decline 5% yoy largely on account of contraction in operating margins.

At the CMP of Rs.2,118, the stock is trading at 16.7x FY2014E earnings. Currently, we have a Neutral rating on the stock.

Source : Equity Bulls

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