Hold Bajaj Auto Share; target of Rs 2840: ICICI Direct
Bajaj Auto Share Hold Rating
Bajaj Auto Share Target;- Bajaj Auto (BAL) revealed solid outcomes in Q4FY20. Net incomes came in at Rs 6,816 crore (down 7.8% YoY), following higher-than-anticipated mixed ASPs, which were at Rs 68,711/unit (up 10.9% YoY). All out volumes were down 16.9% YoY to 9.9 lakh units (2-W volumes 8.5 lakh units, down 14.8% YoY; 3-W volumes 1.4 lakh units, down 27.8% YoY).
Absolute fares were at 5.1 lakh units, up 6.8% YoY. Revealed EBITDA edges were at 18.4% (up 48 bps QoQ), with a QoQ improvement driven by 150 bps net edge development. Ensuing revealed PAT was flattish YoY at Rs 1,310 crore, helped by higher-than-anticipated other pay (Rs 533 crore versus Rs 432 crore YoY).
Analysis on Bajaj Auto Ltd Stock
For BAL, deals, PAT are relied upon to develop at 2.1%, – 4.1% CAGR, separately, in FY20P-22E. We somewhat raise our objective different (inferred P/E at 17.5x FY22E EPS) on the rear of improved B/S quality, fantastic money position and more advantageous return proportions, graciousness superior to anticipated edges. We have a HOLD rating on BAL with SOTP-based objective cost of Rs 2,840.