Q3FY24 Preview: Bajaj Auto: Revenue seen at Rs. 119,476 million, PAT at Rs. 19,962 million

18 Jan 2024 , 02:30 PM

Result date: January 24, 2023

Recommendation: Buy

Target price: Rs. 7,450

Bajaj Auto witnessed 22% year-on-year growth in its volumes for the December quarter. Large part of this growth was a function of the low-base of the year-ago quarter. Amid improving realizations, the company’s revenue could grow 28% over the year-ago quarter, believe analysts at IIFL Capital Services. Sequentially though realizations could decline owing to an adverse mix of product sales.

Key margin tailwinds (sequential) include operating leverage and fall in precious metals. On the flip side, key margin headwinds (sequential) include lower revenue share of three wheelers in the sales volume. Overall, Bajaj Auto’s EBITDA margin could improve 81 basis points as compared to the year-ago quarter.

Profit After Tax or PAT could grow 33% relative to the year-ago quarter.

Important management insights to watch out for:

• Demand outlook across domestic and international markets
• Margin drivers, pricing actions planned

Rs. Million	December 2023 estimates	QoQ change	YoY change
Volumes	1,197,399	13.9%	21.8%
Revenue	119,476	10.9%	28.3%
EBITDA	23,753	11.4%	33.7%
EBITDA margin	19.9%	9 bps	81 bps
Profit After Tax	19,962	8.7%	33.8%

Source: IIFL Research