Views on Bajaj Auto 3QFY2016 Results: Angel Broking

Views of Mr. Bharat Gianani (Sr. Research Analyst - Automobile, Angel Broking) on Bajaj Auto 3QFY2016 Results:

"Bajaj Auto Ltd (BAL) 3QFY2016 results were in line with estimates; revenues expectedly declined 2% YoY to INR 5,565 cr. The decline in revenues was on account of 3% drop in the volumes. Domestic volumes grew in double digits (10%) led by new product launches (Avenger and Pulsar variants) which led to market share gains. However, export volumes fell steeply 16% YoY led by demand slowdown in Africa and Egypt markets due to slide in crude oil prices. Realisation per vehicle grew 2% YoY led by favourable currency movement (INR depreciation as against the USD). BAL realized about INR 66/USD in 3QFY2016 as against INR 63/USD realized in 3QFY2015. The operating margins declined marginally 70 bp YoY to 21% (coming broadly in line with our estimates of 21.5%). Lower export mix and price cuts in African market to stimulate the demand led to dip in the margins YoY. Operating profit at INR 1,171 cr was in line with our estimate of INR 1,181 cr. Other income more than doubled YoY to INR 200 cr coming in higher than our expectations of INR 165 cr. Net Profit at INR 901 cr was broadly in line with our expectations of INR 873 cr. Given the slowdown in export market, the management has revised down the export volume guidance from 2 mn units to 1.83 mn units in FY2016. We currently have BUY rating on the stock but would tone down our estimates given the slowdown in the export markets."

Shares of BAJAJ AUTO LTD. was last trading in BSE at Rs.2310.05 as compared to the previous close of Rs. 2348.05. The total number of shares traded during the day was 155459 in over 14365 trades.

The stock hit an intraday high of Rs. 2392.75 and intraday low of 2292.25. The net turnover during the day was Rs. 363328480.

Source : Equity Bulls

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