Bajaj Auto (BAL) is the 2nd largest motorcycle manufacturer and largest 3-W OEM domestically (FY22 market share at 18.2%, 61.5% respectively).
BAL reported healthy performance in Q3FY23
BAL’s stock price has grown ~2.8% CAGR (from ₹3,240 levels in Jan 18) over 5 years in line with the broader Nifty Auto index.
Introducing FY25E, we now value BAL at ₹ 4,100 on SOTP basis (15x PE on FY24-25E avg. EPS, stake in PMAG; previous target: ₹3,910).
In our auto OEM coverage we like M&M.
Key Financials | FY20 | FY21 | FY22 | 5 year CAGR (FY17-22) | FY23E | FY24E | FY25E | 3 year CAGR (FY22-25E) |
---|---|---|---|---|---|---|---|---|
Net Sales | 29,918.6 | 27,741.1 | 33,144.7 | 8.8 | 36,367.7 | 41,219.6 | 45,259.3 | 10.9 |
EBITDA | 5,096.2 | 4,928.5 | 5,258.7 | 3.5 | 6,459.2 | 7,990.5 | 8,881.0 | 19.1 |
EBITDA Margins (%) | 17.0 | 17.8 | 15.9 | - | 17.8 | 19.4 | 19.6 | - |
Net Profit | 5,100.0 | 4,554.6 | 5,018.9 | 5.6 | 5,587.9 | 6,817.8 | 7,473.0 | 14.2 |
EPS (₹) | 176.2 | 157.4 | 173.4 | - | 197.5 | 240.9 | 264.1 | - |
P/E | 21.1 | 23.6 | 21.4 | - | 18.8 | 15.4 | 14.1 | - |
RoNW (%) | 25.6 | 18.1 | 17.6 | - | 22.3 | 26.1 | 27.5 | - |
RoCE (%) | 23.9 | 18.2 | 18.4 | - | 24.2 | 29.0 | 31.0 | - |
Q3FY23 Results:
Q3FY23 Earnings Conference Call highlights
Management informed about its recent launch of N160 and P125 carbon fibre, which continued to display solid traction across markets.
Company has taken ~5% price hike in last 12 months & has been largely flattish sequentially.
|/US$ realization stood at ~|81.7 for Q3FY23 vs ~|79.8 in Q2FY23 vs ~|75.1 in Q3FY22.
Spares revenue for Q3FY23 stood at ~|1,100 crores.
Company informed about ECU supply is being near normal to industry level.
Margin performance was due to commodity cost moderation with steel, aluminium witnessing drastic drop, however during Q4FY23 company witnessed slight uptick in nickel & steel & margins to remain largely flat.
Company plans to replicate success of Bajaj KTM partnership to its partnership with Triumph.
On E-2W front, company to continues focus on building capabilities and reducing cost rather than depending on subsidies to reduce cost of products & consequent market share gains.
Export revenue stood at ~US$450 million
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