Bajaj Auto - Low Raw Material Cost, Operating Leverage Drives Q3 Margin: Motilal Oswal
Bajaj Auto Ltd. Pulsar motorcycles sit ready at the end of the assembly line at the company’s factory in Pune, India. (Photographer: Kuni Takahashi/Bloomberg)

Bajaj Auto - Low Raw Material Cost, Operating Leverage Drives Q3 Margin: Motilal Oswal

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

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.

Click on the attachment to read the full report:

Motilal Oswal Bajaj Auto Q3FY21 Result Update.pdf

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