Q3FY21 Result update - Bajaj Auto - ICICI Direct

Bajaj Auto (BAL) reported robust performance in Q3FY21. Net revenues came in at Rs. 8,910 crore (up 16.6% YoY), with blended ASPs for the quarter stood at Rs. 68,181/unit (up 0.4% QoQ). Total volumes were at 13.06 lakh units, up 8.7% YoY (2-W up 16.2% YoY, 3-W down 35.6% YoY). Reported EBITDA in Q3FY21 was at Rs. 1730 crore, with EBITDA margins coming in at 19.4% (up 172 bps QoQ, up 152 bps YoY). The company realised stable gross margins QoQ along with ~100 bps savings in both employee costs and other expenses. Consequent reported PAT was up by 23.4% YoY to Rs. 1,556 crore.

Valuation & Outlook

For BAL, we build 15%, 18.7%, 19.4% volume, sales, PAT CAGR over FY21-23E. We value BAL at a revised target price of Rs. 4,500 using SOTP method (core business at 20x FY23E EPS and 2.5x P/B on KTM investment). We retain our BUY rating on the stock. Government's thrust on exports (notably via PLI scheme) is a long term positive for the company, while in the more immediate sense, BAL offers a play on urban revival post Covid. We are also excited by BAL plans on the electric 3-W front.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_BajajAuto_Q3FY21.pdf

Shares of BAJAJ AUTO LTD. was last trading in BSE at Rs.4094.1 as compared to the previous close of Rs. 3706.6. The total number of shares traded during the day was 353621 in over 26914 trades.

The stock hit an intraday high of Rs. 4130 and intraday low of 3737. The net turnover during the day was Rs. 1424204261.

Source : Equity Bulls

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