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India Equity Research Reports, IPO and Stock News
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About the Company
Bajaj Auto is the flagship company of Bajaj Group and is ranked as the fourth largest 2-wheeler and 3-wheeler maker of the world.
Other than India, the company has its presence in Latin America, Africa, Middle East, South and South East Asia. The two-wheelers
that the company produces are classified into three categories- entry segment, executive segment and premium segment. Bajaj is
also the leading three-wheeler player of the country. Under three-wheeler segment, the company produces both passenger vehicles
and goods carriers. To support the after sales services, the company also has spare parts division. This division makes sure the easy
availability of the parts of the company’s vehicles at affordable price to its customers. The company has three manufacturing plants
with manufacturing capacity of 3.96million units per annum.
Investment Rationale
The latest number of sales (of Nov. 2001) shows that overall sales grew 25% YoY and export grew 42% YoY. Cumulative sales
volume (April-Nov.2011) grew 16% YoY and exports 34%. The company has a sales target of over four million units for the current
fiscal.
Export income is expected to grow in the current quarter on the back of sharp depreciation of Rupee against major currencies. Bajaj
will also benefit through the duty benefit on export in the current fiscal (it is going to expire on March 2012). However demand in the
domestic market is expected to remain soft for some more times due to higher interest rate and increase in the fuel price. Increasing
commodity price is a major concern for the company. Due to this reason the margin is expected to be under pressure for some more
time.
Valuation
At ` 1,616 per share, the stock is trading at a P/E of 15.19x and 12.94x for FY12E and FY13E respectively. On the basis of P/BV, it is
trading at 5.85x for FY12E and 4.03x for FY13E. We expect the topline and bottomline of the company will grow at a CAGR of 25%
and 28% respectively over FY10 to FY13E. We recommend investors to buy this scrip with a target price of ` 1,922 per share for
long term
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
About the Company
Bajaj Auto is the flagship company of Bajaj Group and is ranked as the fourth largest 2-wheeler and 3-wheeler maker of the world.
Other than India, the company has its presence in Latin America, Africa, Middle East, South and South East Asia. The two-wheelers
that the company produces are classified into three categories- entry segment, executive segment and premium segment. Bajaj is
also the leading three-wheeler player of the country. Under three-wheeler segment, the company produces both passenger vehicles
and goods carriers. To support the after sales services, the company also has spare parts division. This division makes sure the easy
availability of the parts of the company’s vehicles at affordable price to its customers. The company has three manufacturing plants
with manufacturing capacity of 3.96million units per annum.
Investment Rationale
The latest number of sales (of Nov. 2001) shows that overall sales grew 25% YoY and export grew 42% YoY. Cumulative sales
volume (April-Nov.2011) grew 16% YoY and exports 34%. The company has a sales target of over four million units for the current
fiscal.
Export income is expected to grow in the current quarter on the back of sharp depreciation of Rupee against major currencies. Bajaj
will also benefit through the duty benefit on export in the current fiscal (it is going to expire on March 2012). However demand in the
domestic market is expected to remain soft for some more times due to higher interest rate and increase in the fuel price. Increasing
commodity price is a major concern for the company. Due to this reason the margin is expected to be under pressure for some more
time.
Valuation
At ` 1,616 per share, the stock is trading at a P/E of 15.19x and 12.94x for FY12E and FY13E respectively. On the basis of P/BV, it is
trading at 5.85x for FY12E and 4.03x for FY13E. We expect the topline and bottomline of the company will grow at a CAGR of 25%
and 28% respectively over FY10 to FY13E. We recommend investors to buy this scrip with a target price of ` 1,922 per share for
long term
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