Broker's call

| Updated on January 23, 2018 Published on May 22, 2015

Arihant Capital

Bajaj Auto (Neutral)

CMP: ₹3,310

Target: ₹3,360

Q4 net revenues stood at ₹4,739 crore, a decrease of 3.9 per cent on y-o-y basis. Volume was down by whopping 16.4 per cent y-o-y. However, realisations were up by 14.6 per cent y-o-y to ₹59,076 a unit. Exports growth was subdued at 0.7 per cent on y-o-y basis and stood at ₹2,091 crore. Volumes in export market suffered due to devaluation of local currency and state elections in Nigeria, availability of dollar for imports and other macroeconomic uncertainties. We remain “cautiously optimistic” on Bajaj’s business outlook in FY16, due to recovery in the domestic two-wheeler segment and strong export growth. We expect its share in domestic two-wheeler segment to increase in FY16 to about 22 per cent from 16.8 per cent in FY15. We are also quite confident of its export growth momentum to continue.

We forecast Bajaj’s domestic volumes to recover, although, modestly in FY16. We believe export exposure will help Bajaj Auto to tide over weak domestic market.

Published on May 22, 2015
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