Bajaj Auto Q2 Results Review - Strong Performance; Attractive Valuation: Reliance Securities
Bajaj Auto delivered a healthy operating performance, on the back of an improved realisation, better mix, favorable exchange rate.
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Reliance Securities Report
Bajaj Auto Ltd. delivered a healthy operating performance, with Ebitda margin of 17.2% (24 basis points above our estimate of 17%), on the back of an improved realisation, better mix and favorable exchange rate.
Revenue grew by 16% YoY (up 28% QoQ) to Rs 102 billion (3.6% above our estimate of Rs 98.5 billion), on the back of average selling price growth (up 16% YoY/up 3% QoQ) to Rs 88,640 and volume growth (up 1% YoY/up 23% QoQ) to 11,51,012 units.
Its Ebitda margin expanded by 125 basis points YoY (up 104 bps QoQ) to 17.2% versus our estimate of 17%, due to better control on employee cost and other expenses in addition to higher realisation.
Bajaj Auto’s reported adjusted profit after tax was Rs 15.3 billion (up 20% YoY/up 30% QoQ), versus our estimate of Rs 14.6 billion.
We believe that the better product mix, higher realisation, market share gain in domestic market, reviving three-wheeler business coupled with a favorable exchange rate would support Bajaj Auto’s margins, despite the subdued exports.
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