Buy Bajaj Auto Ltd - Motilal Oswal

Bajaj Auto (BJAUT IN; Mkt Cap USD8.2b, CMP Rs1,297, Buy)

Bajaj Auto's 3QFY11 results were better than expected, with EBITDA margin at 20.3% (v/s our estimate of 20.2%), driven by lower than estimated fixed costs. Higher other income boosted recurring PAT to Rs6.67b (v/s our estimate of Rs6.32b).

We are upgrading our EPS estimates by 4.8% to Rs106.2 for FY12 and by 4.1% to Rs117.8 for FY13. Post correction, the stock is attractively valued at 12.2x FY12E and 11x FY13E EPS. Upgrade to Buy, with a target price of Rs1,593 (~15x FY12E EPS).

Source : Equity Bulls

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