Bajaj Auto (BJAUT IN) 2QFY23 - Result First Cut - Reliance Securities

Mr. Mitul Shah - Head of Research at Reliance Securities.

Bajaj Auto (BJAUT IN) delivered a healthy operational performance in 2QFY23 with EBITDA margin coming in at 17.2%, 24bps above our estimate of 17%. Its revenue and PAT exceeded our estimates by 3.6% and 4.9% respectively.

# Revenue increased by 16% YoY (up 28% QoQ) to Rs102bn, above our estimate of Rs98.5bn on the back of a price hike and favourable exchange rate.

# Revenue growth was led by ASP growth of 16% YoY (up 3% QoQ) to Rs88,640 and volume growth of 1% YoY (up 23% QoQ) to 11,51,012 units.

# Its EBITDA increased by 26% YoY (up 36% QoQ) to Rs17.6bn, 5% above our estimate of Rs16.7bn due to higher realisation and tight cost control on other expenses. Its EBITDA margin expanded by 125bps YoY (up 104bps QoQ) to 17.2%, vs our estimate of 17%, due to better exchange rate, higher realization and better mix.

# It recorded a Adj PAT of Rs15.3bn (up 20% YoY and up 30% QoQ), vs. our estimate of Rs14.6bn.

Our View: BJAUT reported healthy performance in 2QFY23. However, going forward we expect turbulence in its exports business amid a slowdown in a few geographies. In view of significant cut in high margin exports business, slower recovery in domestic business, market share loss domestically and in overseas coupled, at present we have SELL rating on BJAUT, while post management's commentary on exports outlook, we would revisit our recommendation.

Shares of Bajaj Auto Limited was last trading in BSE at Rs. 3569.00 as compared to the previous close of Rs. 3605.25. The total number of shares traded during the day was 7633 in over 2093 trades.

The stock hit an intraday high of Rs. 3663.40 and intraday low of 3554.00. The net turnover during the day was Rs. 27617066.00.

Source : Equity Bulls

Keywords

BajajAuto INE917I01010 Q2FY23 H1FY23 ResultUpdate FirstCut RelianceSecurities