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Showing posts from January, 2010

Bajaj Auto

Bajaj Auto - Results Update.
Strong sequential volume growth helps Bajaj maintain margins despite raw material pressures.

Bajaj reported 3QFY10 PAT of Rs4.75 bn (up 189% yoy and 18% qoq), was in line with our estimate of Rs4.69 bn. 3QFY10 EBITDA margin at 22.9% grew 760bps yoy and 10 bps qoq versus 22.4%. The margin upside was driven by higher-than-expected other operating income, which includes export incentives. Average realizations declined 4% on a yoy and qoq basis, driven by the higher proportion of the newly launched Discover 100cc. Raw material costs as a percentage of sales increased by a larger-than-expected 300 bps, some of which must have been driven by the lower realization. 3QFY10 volumes grew 64% yoy led largely by the newly launched Discover100cc volumes and improvement in export and 3-wheeler volumes. Bajaj Auto will likely benefit from the Pulsar 135cc launched in December going forward on a sequential basis.

New launches to drive domestic volume growth in FY2011E; expec…