04 October 2010

JM Financial: Bajaj Auto – Going strength-to-strength

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Bajaj Auto – Going strength-to-strength
􀂄 Expect life high volumes of 340,000 units (up 21% YoY and 3.2% MoM).
􀂄 Domestic and export volumes expected to grow 17% and 32% respectively.
􀂄 Volumes could have been higher but for shortage of trucks.
􀂄 Expect Discover and Pulsar to clock c.130,000 and c.85,000 units
respectively.
􀂄 See sustained demand for three-wheelers due to de-licensing in Tamil Nadu
and expected opening of Delhi permit market after Common Wealth Games.
􀂄 Very well placed to capitalise on the probable Hero-Honda split.
􀂄 Remains our preferred large cap play on two-wheelers; maintain BUY with a
target price of `1,644 (13% upside).

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