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Bajaj Auto
Neutral
BAJA.BO, BJAUT IN
4QFY11 Results first take: Margins surprise on
upside; Await clarity on Volume outlook
• 4Q reported PAT at Rs. 14.0B, included an exceptional gain of Rs. 7.2B.
Adjusting for the same, the PAT came in at Rs.6.8B (+20% yoy), which
was above ours and street estimates – driven by improved profitability.
4Q EBITDA margins came in at 20.5% (+20bp qoq), which was led by a
healthy product mix and cost control measures.
• Healthy volumes +17% yoy and higher realizations (+5% yoy) led to a
+24% yoy revenue growth at Rs.42.0B. EBITDA margins came in at
20.5% - (-240bp yoy but + 20bp qoq). The raw material costs ratio
declined to 70.9% qoq (-50bp qoq), given price hikes taken in the
quarter as well as a richer product mix. The selling & distribution
expenses were contained in the quarter as well.
• The company booked exceptional of Rs. 7.2B. This included sales tax
deferral incentives of Rs. 8.3b and an impairment loss of Rs.1B related to
the Bajaj Indonesia venture. Other Income at Rs.1010m (vs. 425m in
4QFY10), was sharply higher – given increasing cash surplus with the
company. Investments as of Mar’ 11 stood at over Rs.40B. Tax rates
were also lower at 15.5% (vs. 28% yoy).
• Key takeaways from press meet: Volume Outlook: While management
has guided for double digit growth rate, they highlighted that the
domestic industry growth is likely to moderate (given inflationary
pressures). They expect growth in the exports market to remain healthy.
Further, demand for three wheelers will continue to be driven by the
replacement segment. Margin Outlook: The management believes that
the commodity inflationary pressures appear to be easing (given that
input prices are moderating). This will be supportive of margins.
• The company will be hosting a conference call tomorrow at 3:30pm –
dial in nos are +9122 3065 0143 / +91 22 6629 0365. We would await
clarity on the growth outlook – (given that while industry growth is
likely to moderate, the OEM has been losing market share in the
domestic segment over 4Q).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bajaj Auto
Neutral
BAJA.BO, BJAUT IN
4QFY11 Results first take: Margins surprise on
upside; Await clarity on Volume outlook
• 4Q reported PAT at Rs. 14.0B, included an exceptional gain of Rs. 7.2B.
Adjusting for the same, the PAT came in at Rs.6.8B (+20% yoy), which
was above ours and street estimates – driven by improved profitability.
4Q EBITDA margins came in at 20.5% (+20bp qoq), which was led by a
healthy product mix and cost control measures.
• Healthy volumes +17% yoy and higher realizations (+5% yoy) led to a
+24% yoy revenue growth at Rs.42.0B. EBITDA margins came in at
20.5% - (-240bp yoy but + 20bp qoq). The raw material costs ratio
declined to 70.9% qoq (-50bp qoq), given price hikes taken in the
quarter as well as a richer product mix. The selling & distribution
expenses were contained in the quarter as well.
• The company booked exceptional of Rs. 7.2B. This included sales tax
deferral incentives of Rs. 8.3b and an impairment loss of Rs.1B related to
the Bajaj Indonesia venture. Other Income at Rs.1010m (vs. 425m in
4QFY10), was sharply higher – given increasing cash surplus with the
company. Investments as of Mar’ 11 stood at over Rs.40B. Tax rates
were also lower at 15.5% (vs. 28% yoy).
• Key takeaways from press meet: Volume Outlook: While management
has guided for double digit growth rate, they highlighted that the
domestic industry growth is likely to moderate (given inflationary
pressures). They expect growth in the exports market to remain healthy.
Further, demand for three wheelers will continue to be driven by the
replacement segment. Margin Outlook: The management believes that
the commodity inflationary pressures appear to be easing (given that
input prices are moderating). This will be supportive of margins.
• The company will be hosting a conference call tomorrow at 3:30pm –
dial in nos are +9122 3065 0143 / +91 22 6629 0365. We would await
clarity on the growth outlook – (given that while industry growth is
likely to moderate, the OEM has been losing market share in the
domestic segment over 4Q).
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