Maintain 'buy' on Bajaj Auto – TP Rs.2440 - Geojit BNP Paribas

- Company's 3QFY13 revenue at Rs.5400 crore is up 9% yoy but below analyst's estimates due to lower than expected average realization.

- EBITDA margin of 18.7% declined 100 bps yoy but improved 30 bps sequentially.

- PAT of Rs.820 crore is in line with expectations.

- Bajaj Auto is well positioned to benefit from demand revival in domestic and export markets in FY14 with its new launches (Pulsar NS 200, Discover ST and Discover 100T) and weak rupee.

- These factors will also help the company defend its market share and support margins while competition intensifies in the domestic 2 wheeler market.

- Within the 2W space, we continue to prefer Bajaj Auto over Hero MotoCorp. However, as 2Wheeler industry growth and margin trends are somewhat uncertain, we prefer domestic four-wheeler stocks such as Maruti Suzuki and Mahindra & Mahindra within the Indian auto space.

Source : Equity Bulls

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