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Bajaj Auto - Q4FY22 First Cut - ICICI Direct

Posted On : 2022-04-28 18:51:14( TIMEZONE : IST )

(CMP: Rs. 3,905; MCap: Rs. 1,13,016 crore)

Bajaj Auto (BAL) reported a stellar performance for the quarter, with all key readings surpassing our estimates. The real positive surprise came in from better-than-expected ASPs, gross margin expansion and consequently 4 quarterly high operating margins of 17.1%.

Q4FY22 Earnings Summary

- Total operating income for the quarter came in at Rs. 7,975 crore (down 11.6% QoQ; I-Direct estimate: Rs. 7,511 crore). Blended ASPs for the quarter stood at Rs. 79,129/unit, up 6.2% QoQ (I-direct estimate: Rs. 75,027/unit). Total volumes for the quarter were at 9.8 lakh units, down 17.3% QoQ with exports share in volumes pegged at 60% vs. 56% in Q3FY22. The 3-W share in volume mix improved 80 bps QoQ to 12% in Q4FY22

- Reported EBITDA in Q4FY22 was at Rs. 1,365.6 crore, with EBITDA margins coming in at 17.1% (up 191 bps QoQ) - against our estimate of 13.8%. Real surprise came in form of gross margin expansion which rose ~280 bps QoQ

- Consequent reported PAT was up 21% QoQ to Rs. 1,469 crore vs. our expectation of Rs. 987 crore. PAT include onetime exceptional gain of Rs. 315 crore (incentive receivable from the state government of Maharashtra for the period April 2015-March 2021)

- Cash & Cash equivalents as of March 2022 end stood at Rs. 19,090 crore vs. Rs. 17,689 crore as of March 2021 end

- The company also declared a dividend of Rs. 140/share (~80% dividend payout) with record date for the same fixed as July 1, 2022

Bajaj Auto is a prominent player in the domestic motorcycle space with market share pegged at ~18.2% for FY22. The company has commenced upon its journey towards electrification with Chetak scooter with sales volume in this domain pegged at ~8,200 units in FY22. It had also announced an expansion in the electric 2-W space for ~5 lakh units (to be operational by June 2022) at a capex outlay of ~Rs. 300 crore. Company's product on the E 3-W space is still awaited. The key monitorables going forward at Bajaj Auto would be sustainable margin trajectory, demand outlook in domestic market (particularly entry level motorcycle segment) and further affirmative steps on electrification.

We would be coming out with a detailed report soon post the conference call.

Shares of Bajaj Auto Limited was last trading in BSE at Rs. 3833.50 as compared to the previous close of Rs. 3905.95. The total number of shares traded during the day was 45542 in over 6394 trades.

The stock hit an intraday high of Rs. 3992.05 and intraday low of 3804.80. The net turnover during the day was Rs. 175516137.00.