Bajaj Auto - Motorcycle demand still subdued - Kotak

Bajaj Auto's volumes in FY14 have largely been under pressure. In the domestic market, we expect some uptick in 2W volumes from 4QFY14 led by factors such as new launches, increased capacity (for Discover100) and impact of good monsoons. Exports have already started to grow and that gels well in the current scenario of weak INR. 3W sales could likely receive support from opening of new permits. Operating margins are expected to stay largely healthy for the company in 2HFY14. Price correction over the past few weeks provides with attractive entry point in the stock.

We upgrade the stock to BUY with unchanged price target of Rs2,265.

Source : Equity Bulls

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