Bajaj Auto - Q4FY13 Result Review - Angel Broking

Bajaj Auto (BJAUT) reported lower-than-expected operating performance for 4QFY2013, nevertheless, the bottom-line was slightly ahead of our estimates driven by higher other income and lower tax-rate. For 4QFY2013, the top-line posted an in-line growth of 2% yoy (down 12.3% yoy) to Rs. 4,746cr, following a 3.5% yoy (13% qoq) drop in volumes to 981,242 units. The net average realization, however, improved strongly by 6.8% yoy (0.7% qoq) led by favorable foreign exchange rate on the exports front and also due to price hike in the export markets (effective November 2012) to pass on the impact of reduction in export incentives. While, the domestic revenues declined 3.3% yoy (13.2% qoq) led by 8% yoy (18% qoq) decline in volumes; export revenues surged 18.2% yoy led a 5.1% yoy growth in volumes and a 12.5% yoy growth in net average realization.

The EBITDA margin declined 217bp yoy (107bp qoq) to 17.6%, below our expectations of 18.6%, mainly due to adverse product-mix (higher share of less than 125cc motorcycles in the product-mix) and increase in other expenditure. The adjusted net profit registered a marginal growth of 1.9% yoy (down 6.5% qoq) to Rs. 766cr. However, it was slightly ahead of our expectations driven by higher other income (74.6% yoy and 19.9% qoq) and lower tax-rate (at 25.9% as against 30.2% in 3QFY2013).

At the CMP of Rs. 1,808, the stock is trading at 13.2x FY2015E earnings. The stock rating is currently under review.

Source : Equity Bulls

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