Friday, 20 July 2018

Bajaj Auto Q1FY19E Result Expectation

Expectations for Q1FY19E* (standalone numbers):
  • Revenue: Rs7,256cr; up 33% yoy (7% qoq) led by 38% yoy volume growth (17% qoq). We do not expect any major growth in realization (down 3% yoy, 9% qoq), since the company recently slashed prices for its entry level motorcycles. For Q1FY19, domestic volumes were up 44% yoy (11% qoq), while export volumes were up 31% yoy (26% qoq). Given the surge in exports, BJAUT has significant headroom to compete in domestic business based on price to gain market share. The management has guided for 20 lakh export units for FY19, indicating a strong 20% yoy volume growth.
  • EBITDA: Rs1,434cr; up 53% yoy (9% qoq)
  • EBITDA margin: 19.8%; expansion of 252bps yoy (34bps qoq). Better product mix (higher exports, three wheeler sales) to improve margins for the company. Recent Rupee depreciation is beneficial for company as exports contribute 39% to revenues (FY18) and 44% to Q1FY19 volumes.
  • PAT: Rs1,238cr; up 34% yoy (15% qoq)

Q4FY18 performance highlights:
  • Revenue: Rs6,773cr; up 38% yoy (6% qoq); led by 33% yoy volume growth (4% qoq) and 4% yoy realization growth (2% qoq). Volume growth was led by opening up of permits in Maharashtra. The spill-over effect of opening up of 3W permits will be seen in Q1FY19, beyond which the effect is expected to taper off.
  • EBITDA: Rs1,315cr; up 45% yoy (7% qoq);
  • EBITDA margin: 19.4%; expansion of 92bps yoy (8bps qoq); company managed to offset high input cost by taking price hikes. Export realization was helped by INR realization.
  • PAT: Rs1,080cr; up 35% yoy (13% qoq)


BUY BAJFINANCE 2550 CALL ABOVE 55.00 TARGETS 62.00 / 70.00 / 80.00 STOPLOSS 47.00 

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