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Bajaj Auto
Bajaj Auto (BAL) registered better-than-expected operating performance for
2QFY2012. The company’s top line grew strongly by 21.3% yoy (10.3% qoq)
to `5,267cr, driven by a 16.3% yoy (6.5% qoq) jump in volumes and a 3.7%
yoy (3.3% qoq) increase in net average realization. Volume performance was
led by robust growth on the exports front, with volumes growing by 37.9% yoy
(down 0.9% qoq). Domestic volume growth, however, was slightly muted and
stood at 6.8% yoy (up 11.3% qoq). Net average realization improved mainly
on account of better product mix and higher operating leverage. As a result of
robust export sales, export revenue recorded impressive 50.3% yoy (2.7% qoq)
growth during the quarter. Other operating income also posted 37.2% yoy
growth to `221cr, aiding the overall top-line performance.
On the operating front, EBITDA margin at 20.1% (up 100bp qoq) surprised
positively, led by qoq and yoy improvement in raw-material costs. Superior
product mix and higher contribution from exports markets also benefitted the
operating margin performance. Raw-material expenses declined by 97bp yoy
and 110bp qoq, accounting for 70.6% of sales. Overall, operating profit
during the quarter witnessed 17.9% yoy (16.1% qoq) growth to `1,057cr.
During the quarter, mark to market loss of `95cr relating to hedging contracts
was charged to the P&L. As a result, net profit grew modestly by 6.4% yoy
(2.1% qoq) to `726cr. Net profit was also restricted due to a substantial
increase in interest expense, which stood at `20cr as against `0.65cr in
2QFY2011.
We maintain our Accumulate rating on the stock; however, our target price is
under review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bajaj Auto
Bajaj Auto (BAL) registered better-than-expected operating performance for
2QFY2012. The company’s top line grew strongly by 21.3% yoy (10.3% qoq)
to `5,267cr, driven by a 16.3% yoy (6.5% qoq) jump in volumes and a 3.7%
yoy (3.3% qoq) increase in net average realization. Volume performance was
led by robust growth on the exports front, with volumes growing by 37.9% yoy
(down 0.9% qoq). Domestic volume growth, however, was slightly muted and
stood at 6.8% yoy (up 11.3% qoq). Net average realization improved mainly
on account of better product mix and higher operating leverage. As a result of
robust export sales, export revenue recorded impressive 50.3% yoy (2.7% qoq)
growth during the quarter. Other operating income also posted 37.2% yoy
growth to `221cr, aiding the overall top-line performance.
On the operating front, EBITDA margin at 20.1% (up 100bp qoq) surprised
positively, led by qoq and yoy improvement in raw-material costs. Superior
product mix and higher contribution from exports markets also benefitted the
operating margin performance. Raw-material expenses declined by 97bp yoy
and 110bp qoq, accounting for 70.6% of sales. Overall, operating profit
during the quarter witnessed 17.9% yoy (16.1% qoq) growth to `1,057cr.
During the quarter, mark to market loss of `95cr relating to hedging contracts
was charged to the P&L. As a result, net profit grew modestly by 6.4% yoy
(2.1% qoq) to `726cr. Net profit was also restricted due to a substantial
increase in interest expense, which stood at `20cr as against `0.65cr in
2QFY2011.
We maintain our Accumulate rating on the stock; however, our target price is
under review.
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