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Prabhudas Lilladher Report
Bajaj Auto Ltd.’s Q2 FY23 performance came ahead of our estimates, led by better than-expected realisation (at Rs 88,600, up 16/3% YoY/QoQ); which in turn led to better margins at 17.2% (up 100 basis points QoQ, our estimate:16.5%).
This was driven by improved mix in exports and favorable currency realisation.
Domestic volumes doubled QoQ owing to festive season demand and restoration of supply chain. Management expects single-digit growth from this festive season.
In export markets, Bajaj Auto took inventory correction measures, which led to lower exports (~40% of volumes versus 62% sequentially).
There remains concerns on the export side of the business given-
currency devaluation against U.S. dollar in developing markets (eg: U.S. dollar/Naira; 50% plus exports volumes from Africa),
poor availability of U.S. dollar for trade,
retail price increase and
higher interest rates.
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