26 Apr 2022 , 09:03 AM
Result date: 27th April, 2022
Recommendation: Add
Target price: Rs4,000
Bajaj Auto is likely to post a subdued performance in the March 2022 quarter. The company’s sales volumes declined 17% compared to the year-ago quarter and 17.3% on a sequential basis. However, price hikes will curtail fall in revenue to 7.3% over the year-ago quarter and 11.6% on a sequential basis. Company undertook price hikes in January 2022 to pass on pressures from rising input costs (especially aluminium).
Decline in EBITDA as well as PAT is likely to be much higher, especially on a year-on-year basis. Key margin tailwinds include price hikes, favorable currency and richer revenue mix. On the flipside, rising input costs and negative operating leverage could continue to pull margins downward.
Important management insights to watch out for:
Rs Million | March 2022 estimates | YoY change | QoQ change |
Revenue | 79,723 | (7.3)% | (11.6)% |
EBITDA | 12,180 | (20.1)% | (11.2)% |
Profit After Tax | 10,897 | (18.2)% | (10.3)% |
Source: IIFL Research
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