Bajaj Corp Ltd. | Q2FY15 Result Update | Mixed-bag Performance: Strong volume growth; Maintain HOLD | TP Revised from Rs.215 to Rs.279:: IndiaNivesh

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Bajaj Corp Ltd (BCL) performance in Q2FY15 quarter was mixed bag, except
net profit, which was slightly below our estimates.
 BCL’s top line grew by 18.6% Y/Y to Rs.1,876 mn (INSPL est: Rs.1,861 mn) led
by 8.8%/9.8% Y/Y growth in volume/Pricing. Excluding, NO MARKS revenue,
comparable revenue went up 9.8% Y/Y to Rs.1,737 mn. During the quarter,
ADHO segment reported 10.0% Y/Y to Rs.1,689 mn revenue growth. Other
segments (BAHO, ASHO, KPCO Others) revenue de-grew by 8.6% Y/Y to Rs.48
mn (v/s Rs.52 mn in Q2FY14).
 EBITDA went up 23.7% Y/Y to Rs.530 mn (v/s INSPL est Rs.492 mn). During
the quarter, EBITDA margin expanded 118bps y/y (v/s INSPL est: -66 bps) to
28.3% on-account of lower material cost and other expenditure, partially offset
by higher advertising and sales promotion expenditure. During the quarter,
LLP prices increased by 11.9% Y/Y to Rs.84.27/KG (v/s Rs.75.3/KG in Q2FY14).
Other expenditure during the quarter went down 37.9% Y/Y to Rs.197 mn (v/
s Rs.317 mn in Q2FY14).
 Other income during the quarter stood at Rs.83 mn v/s Rs.101 mn in Q2FY14.
Tax rate during the quarter stood at 21% [v/s 21% in Q2FY14]. During the
quarter, BCL reported amortization of Rs.117 mn (exceptional item) as cost
related to NO MARKS acquisition. In next four years (FY14-17), total acquisition
cost of Rs.1409 mn will be amortized. Reported Net profit went up 6.5% Y/Y
to Rs.384 mn. Adjusting other income and exceptional items, the net profit
stood at Rs.418 mn (v/s Rs.310 mn in Q2FY14).

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