Bajaj Auto - Low Raw Material Cost, Operating Leverage Drives Q3 Margin: Motilal Oswal
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Motilal Oswal Report
Bajaj Auto Ltd.’s operating performance was driven by favorable mix, lower marketing spends, and operating leverage.
It has both near (three-wheeler recovery) and long term (premiumization and exports) levers, which are fairly reflected in current valuations.
Revenue/Ebitda/profit after tax grew 16.6%/26.5%/23.4% YoY. For nine months FY21, revenue/Ebitda/profit after tax declined 17.1%/11.4%/15% YoY.
We upgrade our FY21E/FY22E earning per share by 7%/5% to factor in mix, cost savings, and an upgrade in KTM’s profit after tax.
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