1QFY2016 Result Update | Automobile
July 25, 2015

Bajaj Auto

NEUTRAL

Performance Highlights

CMP
Target Price

Y/E March (` cr)
Net Sales
Adj. EBITDA
EBITDA Margin (%)
Adj. net profit

1QFY16
5,613
1,140
20.3
1,015

1QFY15
5,252
925
17.6
740

% chg (yoy)
6.9
23.2
270 bp
37.1

4QFY15
4,739
904
19.1
666

% chg (qoq)
18.4
26.1
120 bp
52.4

Source: Company, Angel Research

`2,497
-

Investment Period

-

Stock Info
Sector

Automobile

Market Cap (` cr)

72,268

Operating performance misses estimates; other income boosts profitability: Bajaj
Auto (BJAUT)’s 1QFY2016 results have come in marginally below our estimates on the operating front. However, higher other income boosted profitability, leading the net profit to come in ahead of our estimates.

Net Debt (` cr)

(9,628)

Revenues grew 7% yoy to `5,613cr, which is lower than our expectation of
`6,058cr. Volumes grew 3% yoy, led by recovery in the motorcycle segment.
Realisation/vehicle grew 4% yoy but declined by 9% on a sequential basis.
Realisation/vehicle at `55,412 was lower than our estimate owing to higher proportion of entry level bikes in the sales mix. Operating margin, at 20.3%, was broadly in line with our expectation. However, given the lower revenues, the operating profit, at `1,140cr, missed our estimate of `1,193cr. Other income, at
`437cr, almost doubled yoy, thus boosting profitability. Net Profit, at `1,015cr, beat our estimates of `952cr.

Face Value (`)

Outlook and valuation: The domestic two-wheeler industry is likely to remain under pressure in FY2016 on account of slowdown in rural demand. Unseasonal rains, which have led to crop damage, have impact rural incomes and in turn rural demand. BJAUT, however is expected to outperform the industry and regain market share on back of new launches across the