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Bajaj Auto reported adj PAT of INR8.3bn (25%YoY, 5.6% QoQ growth),
marginally ahead of our estimates. As expected, INR depreciation and
higher contribution from exports led to a 100bps sequential improvement
in both gross and EBITDA margins to 29.6% and 21% respectively. The
management has scheduled an earnings concall on 20th January 2012 at
13:30 IST. Key things to watch out for are: (1) the management guidance
on exports, (2) clarity on hedging rates and (3) new launches. We will
revisit our financial forecasts post the earnings concall.
Q3 slightly better than expectations
Net sales at INR50.6bn (21.2% YoY, ‐4% QoQ) were largely in line with our expectations.
The average realization growth of 3.8% QoQ was primarily driven by a 9% QoQ growth
in (average) exports realization, largely due to price hikes, improvement in product mix
and depreciating INR. As a result, the overall EBITDA margin of the company expanded
90bps on a sequential basis. So far, the benefit of softening input costs has not accrued
to the company. Total adj PAT at INR8.3bn was marginally ahead of ours and consensus
expectations. Other highlights during the quarter were: (1) lower MTM losses on forex
hedges at INR588m vs INR954m in Q2FY12, (2) delay in receiving VAT refunds and (3)
lower addition to cash balance. We would get more clarity on these during the earnings
call tomorrow.
All eyes on exports, new launches in domestic market
Management guidance on exports volume growth and forex contracts is key to watch
out for in the call. Given the sluggishness in domestic demand, we expect new Pulsar
and new Discover launch to be major events in the next two quarters for the company.
Outlook and valuations
We have been positive on Bajaj Auto due to its presence in export markets which is
paying off quite well. Currently we have a ‘BUY/SO’ recommendation/rating on the
stock. We will revisit our financial forecast post the earnings call tomorrow.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bajaj Auto reported adj PAT of INR8.3bn (25%YoY, 5.6% QoQ growth),
marginally ahead of our estimates. As expected, INR depreciation and
higher contribution from exports led to a 100bps sequential improvement
in both gross and EBITDA margins to 29.6% and 21% respectively. The
management has scheduled an earnings concall on 20th January 2012 at
13:30 IST. Key things to watch out for are: (1) the management guidance
on exports, (2) clarity on hedging rates and (3) new launches. We will
revisit our financial forecasts post the earnings concall.
Q3 slightly better than expectations
Net sales at INR50.6bn (21.2% YoY, ‐4% QoQ) were largely in line with our expectations.
The average realization growth of 3.8% QoQ was primarily driven by a 9% QoQ growth
in (average) exports realization, largely due to price hikes, improvement in product mix
and depreciating INR. As a result, the overall EBITDA margin of the company expanded
90bps on a sequential basis. So far, the benefit of softening input costs has not accrued
to the company. Total adj PAT at INR8.3bn was marginally ahead of ours and consensus
expectations. Other highlights during the quarter were: (1) lower MTM losses on forex
hedges at INR588m vs INR954m in Q2FY12, (2) delay in receiving VAT refunds and (3)
lower addition to cash balance. We would get more clarity on these during the earnings
call tomorrow.
All eyes on exports, new launches in domestic market
Management guidance on exports volume growth and forex contracts is key to watch
out for in the call. Given the sluggishness in domestic demand, we expect new Pulsar
and new Discover launch to be major events in the next two quarters for the company.
Outlook and valuations
We have been positive on Bajaj Auto due to its presence in export markets which is
paying off quite well. Currently we have a ‘BUY/SO’ recommendation/rating on the
stock. We will revisit our financial forecast post the earnings call tomorrow.
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