Q2FY23 Preview: Bajaj Auto: Revenue seen at Rs99,116 million, PAT at Rs14,860 million

13 Oct 2022 , 12:57 PM

Result date: 14^th October, 2022
Recommendation: Add
Target price: Rs3,950

Bajaj Auto witnessed 23% jump in sales volumes on a sequential basis, partly on the back of a low-base in the previous quarter amid chip shortage. Volumes were flat as compared to the year-ago quarter. The company’s revenue could grow 15% over the year-ago quarter and 24% sequentially.

Fall in commodity prices (small benefit in Q2), price hikes, Rupee depreciation (3% lower QoQ), operating leverage, higher revenue share of three wheelers (from 15% to 18%) could aid margins during the quarter. However, this will be partly offset by lower revenue share of exports (from 54% in Q1 to 39% in Q2), higher share of CT/Platina within domestic MC.

Bajaj Auto’s Profit After Tax or PAT could grow 27% both sequentially as well as over the year-ago quarter.

Important management insights to watch out for:

• Demand trends across all key segments
• Pricing action and new launches planned
• Margin levers and outlook

	September 2022 estimates	QoQ change	YoY change
Volumes	1,151,012	23.3%	0.6%
Revenue (Rs. mn)	99,116	23.8%	15.0%
EBITDA (Rs. mn)	16,394	26.4%	30.2%
EBITDA margin	16.5%	34 bps	193 bps
Profit After Tax (Rs. mn)	14,860	26.6%	27.2%

Source: IIFL Research