BJAUT registers lower-than-expected sales in December 2013 - Angel Broking

Bajaj Auto (BJAUT) reported disappointing performance in December 2013 with total sales posting a significant decline of 13.4% yoy (4.1% mom) to 297,776 units led by continued weakness in the domestic sales. Domestic volumes declined 32.5% yoy (16.9% mom) largely due to the sluggish performance of the Discover family due to higher competition in the entry and executive motorcycle segments and also partly due to the annual maintenance shutdown. While motorcycle sales of the company declined 12.6% yoy (6.5% mom); three-wheeler sales registered a fall of 18.6% yoy during the month. Export volumes though continued its strong traction witnessing a robust growth of 19.6% yoy (12.7% mom) to 150,753 units. The company expects to maintain a monthly run rate of 150,000 units on the exports front going ahead. On the domestic front, the company expects to gain traction post January 2014 with higher production of the new Discover and is planning to launch one more variant of the Discover in February 2014. At the CMP, the stock is trading at 13.4x FY2015E earnings. We maintain our Buy rating on the stock with a target price of Rs. 2,272.

Source : Equity Bulls

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