Q4FY23 Preview: Bajaj Auto: Revenue seen at Rs 86,624 million, PAT at Rs 13,614 million

24 Apr 2023 , 09:46 AM

Result date: 25^th April, 2023

Recommendation: Buy

Target price: Rs 4,675

 

Bajaj Auto is likely to post weak set of numbers for the March 2023 quarter. The company posted volume decline of 12.0% over the year ago quarter and 12.6% sequentially, largely due to lower exports. Domestic sales grew at a solid 32% over the year ago quarter but declined 6% sequentially. This weakness in sales volume is expected to impact overall performance of the company.

A weak rupee, higher average selling prices and higher mix of domestic 3 wheelers are key margin tailwinds, even as negative operating leverage and lower revenue share of exports are key headwinds for the margins. Overall, the company’s EBITDA margin could contract 100 basis points sequentially, while inching up 89 basis points over the year-ago quarter.

Profit After Tax or PAT is likely to toe the line of EBITDA performance, rising 10.5% over the year ago quarter, but declining 8.7% sequentially.

Important management insights to watch out for:

• Outlook on sales volumes, particularly in exports markets
• Drivers of margins, input costs and price hikes
• Insights into demand across key markets

	March 2023 estimates	YoY change	QoQ change
Volumes	859,687	(12.0)%	(12.6)%
Revenue (Rs Million)	86,624	8.6%	(7.0)%
EBITDA (Rs Million)	15,606	14.3%	(12.2)%
EBITDA Margin	18.0%	89 bps	(106) bps
Profit After Tax (Rs Million)	13,614	10.5%	(8.7)%

Source: IIFL Research