Result Update: Bajaj Auto Limited - ACCUMULATE - TP Rs. 3,124 - Kotak

BAL's 4QFY17 financial performance was weak YoY, impacted by volume de-growth, input cost pressures and certain one-off's. Revenues during the quarter declined 9% YoY, EBITDA margin contracted YoY and reported net profits was down by 16% YoY. In the domestic market, we expect gradual pick-up in company's volume. In exports, management indicated that volumes bottomed out in FY17 and remain cautiously optimistic on growth in FY18. Further, lower base will likely aid export volume growth for the company in FY18. Due to certain headwinds like higher raw material cost and rising cost of consumer acquisition, company expects EBITDA margin in FY18 to be lower as compared with FY17. Given slow recovery in company's domestic volumes, uncertainty in exports and weak margin guidance, we cut our FY18 earnings estimates. We introduce FY19 estimates and roll over our target price based on FY19 earnings estimate. We recommend ACCUMULATE rating (earlier BUY) on the stock with revised price target of Rs3,124 (earlier Rs3,208).

Shares of BAJAJ AUTO LTD. was last trading in BSE at Rs.2810.15 as compared to the previous close of Rs. 2821.6. The total number of shares traded during the day was 14473 in over 1138 trades.

The stock hit an intraday high of Rs. 2839.15 and intraday low of 2796.8. The net turnover during the day was Rs. 40792683.

Source : Equity Bulls

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