Bajaj Auto:-
"Bajaj Auto 1QFY13 results are below estimates, with EBITDA margins at
17.9% (v/s est 18.7%) and adj PAT at INR7.2 (v/s est INR7.27b), impacted
by adverse product/market mix and lack of operating leverage. Volumes
de-grew by 1% YoY (+6% QoQ) to 1.08m units (v/s est 1.1m). Realizations
up 4.7% YoY (-1.4% QoQ) to INR45,095/unit (v/s est INR45,440). Net
revenues grew by 3% YoY (5% QoQ) to INR48.6b (v/s est INR49.8b). EBITDA
margin declined by 190bp QoQ (+10bp YoY) to 17.9% (v/s est 18.7%),
impacted by adverse product (lower 3W volumes) and market mix (lower
exports), higher staff cost (+70bp QoQ) despite 6% QoQ higher volume
growth and higher other expenses (no benefit of operating leverage).
Higher other income at INR1.8b (v/s est INR1.3b) boosted adj PAT to
INR7.2b (v/s est INR7.27b) - 1% YoY growth (-5% QoQ)."
"We cut FY13EPS estimates by 1% each to model higher cost push, impact
of which is diluted by price increase in domestic market from Jul-12 of
~1% (over & above ~1.25% increase in April). However, we upgrade
FY14 EPS by ~5% to INR138, as we change our USD/INR to 52 (v/s 50
earlier). We model volume growth of ~8%/13% for FY13/FY14 and EBITDA
margins of 18.6%/18.9% respectively. We model USD/INR rate of 50 each
for FY13 and 52 for FY14 (v/s 49.5 for 1QFY13 v/s 48.2 for FY12). Our
estimates could see further upgrade as it hedges its FY14 receivables at
favorable rate of over 55. If it hedges FY14 Fx exposure at 55, our EPS
would see upgrade of ~5% to ~INR145. The stock is valued at 13.9x FY13E
EPS of INR109.7 and 11x FY14E EPS of INR138.1, and ~3.3% dividend yield
on FY13 basis. Maintain Buy with target price of INR1,933 (14x FY14E
EPS)," says Motilal Oswal research eport.
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