Bajaj Auto - Q1FY14 Result Update - Kotak

Bajaj Auto's 1QFY14 revenues came in at Rs49,111mn, a growth of 0.9% YoY despite 9.2% downfall in volumes. EBITDA margins (adjusted for MTM loss) stood at 20.4%, a sharp improvement both YoY and QoQ and the same was helped by INR depreciation. Company reported PAT of Rs7,377mn, however adjusted for MTM losses, PAT is much higher than expectation due to strong EBITDA margin performance.

Volume growth though is expected to stay soft, but the company is expected to perform strongly on the EBITDA margin front aided by weakness in INR. We revise our FY14 estimates to factor sustained weakness in INR and accordingly raise our EBITDA margin estimates.

We increase our target price to Rs2,126 (earlier Rs1,953) and retain our ACCUMULATE rating on the stock.

Source : Equity Bulls

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