Bajaj Corp Ltd's Q3FY19 standalone net profit rises 8.9% yoy to Rs60.1cr: In-line with Estimates

The company’s standalone revenue in the quarter stood at Rs229.6cr, up 10.3% yoy and 7.9% qoq.

Jan 09, 2019 02:01 IST India Infoline Research Team

Bajaj Corp Ltd Q3FY19

Standalone Results Q3FY19: (in Rs cr)

Q3FY19 yoy (%)
Revenue 229.6 10.3
EBITDA 71.0 4.7
EBITDA Margin (%) 30.9 [167]
Net Profit  60.1 8.9
***EBITDA margin change is bps
Bajaj Corp Ltd's Q3FY19 numbers were broadly in-line with our estimates on all fronts. The company's revenue in the third quarter of FY19 grew 10.3% yoy to Rs229.6cr, in-line with the estimates. However, on account of higher raw material and employee cost, EBITDA grew only 4.7% yoy to Rs71cr (estimated Rs69.2cr). EBITDA margin, thus, contracted 167bps yoy to 30.9% (estimate 30.7%). Aided by higher other income, Bajaj Corp reported an 8.9% yoy growth in PAT to Rs60.1cr (estimate 57.9cr). 
  • Raw material and employee costs were up 164bps and 122bps yoy (as percent of net sales).
  • The cost (adjusted landed cost, net of input credit) of key raw materials LLP (~31% of total cost) and Refined vegetable oil (~14% of total cost) were up by 20.5% and 12.3% yoy respectively.
  • Other income for the quarter stood at Rs7.4cr against Rs4.5cr in Q3FY18.
  • Company recommended an interim dividend of Rs14 per share.
  • Volume market share of Bajaj Almond Drops improved to 7.7% in MAT Nov 18 (up 50bps yoy). And, No Marks witnessed 2x offtake growth in Q3FY19.
  • Further, company launched Rs10 pack of ADHO for the rural market with an objective to upgrade the consumers.
  • Domestic business sales grew by 12.5% yoy (ex-CSD 11.7% yoy); modern and general trade grew by 27.9% and 10.3% respectively. Key positive surprise was rebound in CSD sales, up 35.3% yoy. International business was also up 11.8% yoy.
  • In volume terms, CSD, MT and GT grew by 34.2%, 21.8% and 5.1% yoy respectively. However, international business sales volume declined by 2.1% yoy.
  • Company indicated that rural markets are still leading the overall growth; witnessed buoyancy in the rural offtakes in Q3FY19 vs Q2FY19. Wholesale channel also witnessed better traction towards the end of Q3FY19.
  • Though CSD performed better during the quarter, company remains uncertain about growth outlook.
  • Towards the end of Q3FY19, input costs have started witnessing softening trend; we believe the benefit for the same will be reflected in Q4FY19E.
  • The company will be hosting Q3FY19 conference call on Thursday, January 10.
Stock closed 2.32% down on account of muted result. We await more clarity on demand outlook during the conference call. Stock is currently trading at PE of 22x FY20E EPS.  

Technical View:

Bajaj Corp Ltd share price is currently trading at Rs381, down 3 points, or 0.78%, from its previous close of Rs384 on the BSE. The scrip opened at Rs388 and has touched a high and low of Rs389.75 and Rs376.05, respectively. So far, 4,63,349 (NSE+BSE) shares have been traded on the counter. The stock is currently trading below its 200-DMA.

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