Q4FY24 Preview: Bajaj Auto: Revenues seen at ₹114,295 Million, PAT at ₹19,196 Million

16 Apr 2024 , 12:26 PM

Result date: April 18, 2024

Recommendation: Buy

Target price: ₹8,100

Bajaj Auto has witnessed 24% growth in its sales volume over the year-ago quarter (albeit on a low base). On a sequential basis though, sales volume declined 11% owing to the festive season in Q3. Analysts at IIFL Capital Services expect the company’s average selling price to improve both sequentially as well as over the year-ago quarter. Overall, revenue growth is pegged at 28.4% over the year-ago quarter even though sequentially revenue could decline 5.6%.

The company’s EBITDA margin could inch up 73 basis points over the year-ago quarter and decline 6 basis points sequentially. Sequential margin performance is likely to be aided by a favorable mix of products sold and easing costs of key raw materials (steel, precious metals). On the flip side, negative operating leverage is likely to be a key pressure on margins as compared to Q3.

Bajaj Auto’s Profit After Tax or PAT could grow 34% over the year-ago quarter and decline 6% sequentially.

Important management insights to watch out for:

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

	March 2024 estimates	QoQ change	YoY change
Volumes	1,065,626	(11.0)%	24.0%
Revenue (₹ mn)	114,295	(5.6)%	28.4%
EBITDA (₹ mn)	22,862	(5.9)%	33.2%
EBITDA margin	20.0%	(6) bps	73 bps
Profit After Tax (₹ mn)	19,196	(6.0)%	34.0%

Source: IIFL Research